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Are you guys sure that the ipod is not the one that plays the mp3 and just sends the signal to the car?? Maybe that's why it need both connections:
USB: controls
Audio Jack: audio signal played through the iPod.
In general, with the normal USB cable, you are not able to read the mp3 files loaded with iTunes into the iPod. (unless you use a program such as copy pod).
All of this sounds reasonable if you consider that you shouln't need the audio connection.
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