They are not transmitting a square wave. The square wave is the drive waveform that is modulating the transmitter. If you look at the square wave shot, you wi

They are not transmitting a square wave. The square wave is the drive waveform that is modulating the transmitter. If you look at the square wave shot, you will see longer "high" periods (dash) and shorter "high" periods (dots). In classic "CW" (continuous wave, aka. Morse Code), it would be keying the transmitter on and off. When the transmitter is on, it is transmitting a pure sine wave at the Tx frequency (10.140015 MHz). When the transmitter is off, it is transmitting nothing (duh). Looking at the schematic, the kit in question is transmitting continuously and modulating the carrier to be slightly higher or lower in frequency based on the square wave modulation drive. For a direct conversion receiver[1], (heterodyne[2] works the same way, but uses intermediate frequencies to improve selectivity) the receiver has an internal oscillator that is tuned to approximately 1000 Hz difference from the transmitter. By mixing the two signals in the receiver, it demodulates the transmitted signal into a 1000 Hz tone when the transmitter is transmitting and nothing when it is not transmitting (CW) or higher and lower pitches with the kit from the article. The CW on/off modulation is what you hear (simulated) in the WW2 movies with the beeping ("dit" and "daaah") sounds. [1] http://en.wikipedia.org/wiki/Direct-conversion_receiver http://en.wikipedia.org/wiki/Direct-conversion_receiver [2] http://en.wikipedia.org/wiki/Heterodyne http://en.wikipedia.org/wiki/Heterodyne see also http://en.wikipedia.org/wiki/Superheterodyne_receiver http://en.wikipedia.org/wiki/Superheterodyne_receiver