A stereo is a Muggle device for the playing and/or amplification of sound. It is often used to play music, though can be used for most types of audio playback.
The Dursley family owned a stereo. During the summer holidays of 1995, as Vernon Dursley headed out with the rest of the family, having received an invitation to a fictitious All-England Best-Kept Lawn competition, he instructed Harry Potter not to touch any of the family possessions, including the stereo. Harry apathetically agreed to the request.
Later that evening, when Harry arrived at 12 Grimmauld Place, it appeared before Harry's eyes as though an extra house had inflated between two other houses. As Harry observed this strange sight, the stereo in the neighbouring number 11 thudded on, the Muggles living there having felt nothing.