It looks "reasonable" but I don't know if that circuit will work. Plus, there are no component values and the transformer selection could be critical. Depending on the transformer's primary impedance you'll probably need to drive it from something "stronger" than the Arduino.
I think i will need to work backwards from my intended output to find what values I will need for the components. When you say transformer, do you mean the coupled inductor?
Do you have an oscillator?
Not yet, but I was planning on using a Texas Instruments integrated circuit VCO oscillator. It would accept an input voltage of 5V and output an AC voltage with a frequency of 35MHz, according to the information page about this produce.
And of course, you'll need a receiver.
And, you'll need some kind of MODEM (or MODEM-like) software to convert the data to audio and another one to decode the audio on the other end.
What I have in mind, is using the Detectors output DC current to pass over a resistor, and I will measure the voltage drop across that resistor with a second Arduino board. It will write a 1 or a 0 based on this voltage into a matrix, and when this process is complete it will display the matrix onto a small LCD screen.
I think that it will be possible to start the transmission with a voltage twice the voltage which represents a 1, and end the transmission in the same way so that my code can distinguish between the start and finish.
Are you able to do it with just the "audio" transmission (no RF) over a wire?
I wanted to try to do it wire free, as I'm hopefully going to get an internship at a radio communications company, and thought this project would be a good way to impress them.
You can get Arduino transmitter/receiver shields and to me, that seems like the way to go.
If worst comes to worst, I suppose that is an option. I'd prefer to build a simple circuit myself that can accomplish this though.