Figure out which songs you'd like to put in your game and organize them. Make sure they're all MP3 files.
Copy the songs you've chosen to a separate folder, such as My Documents, for the time being. Make sure you copy them - not move them - otherwise the music won't also be in the folders they were in previously.
Find your Custom Music folder by going to My Documents > Electronic Arts > The Sims 3 > Custom Music.
Move all of the MP3 files to your Custom Music folder.
The music will play in your game now. To access the music, have a sim turn the radio on and choose "Custom Music" as the station.