Well, it is coming along pretty good. Right now, the way it works is as follows:
There can only be 10 requests in the queue at any one time. If there are already 10, nobody can submit a request until one clears.
At random points throughout the day, requests are pulled from the queue and played. When they play, it will say on the front page of DG 'Now playing Foo by Bar - Requested by [username]'
You can currently only submit one request per day
Due to US DMCA regulations, there will not be any notification of when your request will play - it will just be at some point in the next few hours.
I'm still tweaking it, but I have almost all the web coding done, I just have to finish the backend request queueing system.
Oh and btw, right now karma has no bearing on it.