The development of wireless sensing technologies, using signals such as Wi-Fi, infrared, and RF to gather environmental data, has significantly advanced within Internet of Things (IoT) systems. Among these, Radio Frequency (RF) sensing stands out for its cost-effective and non-intrusive monitoring of human activities and environmental changes. However, traditional RF sensing methods face significant challenges, including noise, interference, incomplete data, and high deployment costs, which limit their effectiveness and scalability. This paper investigates the potential of Generative AI (GenAI) to overcome these limitations within the IoT ecosystem. We provide a comprehensive review of state-of-the-art GenAI techniques, focusing on their application to RF sensing problems. By generating high-quality synthetic data, enhancing signal quality, and integrating multi-modal data, GenAI offers robust solutions for RF environment reconstruction, localization, and imaging. Additionally, GenAI's ability to generalize enables IoT devices to adapt to new environments and unseen tasks, improving their efficiency and performance. The main contributions of this article include a detailed analysis of the challenges in RF sensing, the presentation of innovative GenAI-based solutions, and the proposal of a unified framework for diverse RF sensing tasks. Through case studies, we demonstrate the effectiveness of integrating GenAI models, leading to advanced, scalable, and intelligent IoT systems.