O'Connell was nominated last year for the category, but was beaten by Radio 2 stalwart Terry Wogan.
The Sony judging panel descibed the show as "compelling listening -- a really talented broadcaster fronting an inventive and very funny show".
According to the judges: "He succeeds in putting an original spin on topical stories and probably fuels the day's conversations for its listeners. A fresh and original breakfast show with a clear idea of who its audience is, presented with flair and imagination and an obvious love of broadcasting."
The award comes in the wake of the Rajar figures for the first quarter of 2003, which saw the show relegated to 13th biggest breakfast show in London from 12th last time.
The show is thought to have lost listeners as they tuned into news on TV during the war on Iraq.
Xfm also picked up Silver for the music programming category for its 'Music: Response' show, hosted by Zane Lowe, who has since moved to present Radio 1's 'Evening Session'. The Gold went to BBC Radio 3 for 'Late Junction'.
Producer and writers Karl Pilkington and Ben Niedle picked up the Silver for the station sound award for Xfm. Pilkington is a co-host on the 'Ricky Gervais' mid-morning Saturday show. The Gold in that category went to digital station BBC 7.
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