I actually have my iPhone connected via USB. My phone is actually an Android that I connect via bluetooth but I have no music on it, I just was given a free iPhone 4 for the sole purpose of using it for music in my car so I leave it in the center console plugged in with that idea that it just always works and I don't have to fiddle with something before taking off to get music to play. The iPods would freeze on me and index incorrectly (a song would be playing and the information for it on the screen was for a song of a completely different artist and genre). Each iPod did something a bit different, but I haven't tried them in so long I forget what it was. The iPhone 4 was listed as a supported device and having gotten it for free I decided to give it a shot. It works *better* than the iPods in that it doesn't freeze and indexes correctly. The functionality I don't get out of it that that iPods would do until they froze is that I can play a playlist/artist/genre list, etc...and when I have that playing and shut off the car and go to turn it back on later when I drive my car again it starts playing "all songs" starting with the first alphabetical one. I've been leaving it on all songs and just shuffling through them and it will start the song that I left off with that way rather than resetting. However with that It will start with the song I left off with however from then on it will play alphabetically unless I go in and tell it to shuffle EVERY TIME I turn on my car... It really shouldn't be something that de-selects unless you disconnect the device or something. I also like playing through playlists and such when I get in the mood for certain songs and I don't want it to reset to all songs next time I start my car.
My iPods are a 3rd and 4th gen nano, so several years old now, but they did work correctly until they froze from what I can remember other than the indexing issues. I was using the iPods in my old car with my Pioneer head unti without issues for years so I know it's not the iPods. But it's annoying the iPhone 4 is listed as supported but it doesn't work correctly. If Ford would lend me more devices I could test them all for them and tell them what does and doesn't work, but I'm not about to go out and buy a bunch of different and newer players when I own and have tried 3 of the most supported devices for pretty much everything else in the world... I have done a factory reset once before to fix the indexing issue. It did work for that, but they still froze. And next time I synced music up to the iPod the indexing issue was back. Shouldn't have to factory reset every time I add music.