This is a good start for a transmitter, sounds like you need something faster though to be able to form proper sinusoidal waves. Then you'd need to use a PWM function to drive the levels in the wave. Probably not what this Arduino was designed for, but looks like a fun project!
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It'd only take a few additional parts to massively improve the transmitter. A tuned LC circuit can filter out all of the non-1MHz harmonics and feeding the output to a transistor base should amplify the signal considerably.
Might even be able to add voice with another transistor further down.