I'm looking for a car audio unit that has direct input from the iPhone (via USB) into the unit, but does not disable the touchscreen in iPod mode. Most of the units I see (Alpine, Kenwood) have direct input from the iPhone, but music selection and control is done through the unit, which is certainly not as convenient as navigating through albums and playlists on the iPhone touch interface.
as far as i know you won't be able to play your iPod in your car via USB directly to your head unit. my head unit has a USB port which allows me to put .mp3's on a flash drive and just plug n' play however if connect my iPod (or iPhone) to it via USB it will only supply power. no data/audio streaming.
I would suggest googling on the make of your head unit or your car model/year + iPhone to see if you can find any third-party solutions.
My head unit does not have a USB port, but I found a third party solution that plugs in betwee my head unit and my iPhone/iPod. It allows me to either run the controls off my steering wheel (my favorite choice), the car stereo controls, or the iPhone/iPod interface.
I saw a video on YouTube where a guy did a little hack trick on his Sony head unit and he was able to retain the touch functions of his iPod Touch. I don't remember the title, but I'll try to find it and post the link here.
Absolutely perfect solution is the Pioneer deh 7000 bt. i have my iphone 3g connected to it via usb. you can select between using the face for music control or to use the iphone itself. it also has bluetooth! i picked it up for 220 on amazon. Its the one you want!
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Car audio and direct iPhone input via USB
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