As some people might have alredy known, we can use flash drives or some USB hard drives as your music source
Yes, you can play your MP3s from them.
It's easier to use, cheaper, faster and fits in your smallest pocket or keychain
No installations or DIYs, just plug it in!

Here is what i currently use in my car
Note: It should work in most BMWs with 6FL option (iPod usb) if you bought it

Great flash drive
Super fast and big!!!
Fits perfectly, no cables needed

I think he may just be using the USB portion of his Ipod car adapter.

I'm guessing BMW didn't implement full ipod control (or it's only enabled when an ipod is plugged in) but basically, i'd guess that he has a USB port.. and if he plugs in a regular USB storage device (as above, you could even plug in a USB HDD if you wanted) the car can access that directly. If he does indeed only have a USB port (and no 'ipod port') then I'd guess the IPOD goes into some kind of storage emulation mode when it gets plugged in and it pretends to be a flash/storage device to the car...

(Unfortunately infiniti don't offer this to my knowledge, just the stupid compact flash slot)

I honestly thing the whole "IPOD Adapter" thing is the biggest clusterf&&& ever. Each manufacturer has their own interpretation of it. For instance, I like the BMW approach - just a standard USB adapter. That is the most simplistic and universal. Other manufacturers use TRUE IPOD interfaces so you can ONLY use an IPOD.. it's retarded. And then the OTHER manufacturers (lexus, I believe) call their 3.5MM audio input jack an ipod interface.. come on.

Like I referenced in another thread, I think I'm going over to Infiniti on Thursday to the FX Launch party.  I'll check it out, but I think that what you get when you buy ipod interface for the G/FX/EX/Max is the rca input as well as a cord that connects to the ipod.  I don't think the cord can be unplugged from a USB type port at the other end, but like I said I'll look and report back.