Given my time over again I would go for the USB link over the ipod link as it doesn't have any less functionality (there isn't much anyway!) Both only allow you to play from 5 playlists and don't show you the album or song info.
This will allow you to go for a cheaper ipod alternative or one with more functions. Microsoft's Zune looks good as it has WIFI, so you might be able to upload songs whilst it was still in the car
If you do want to be able to browse all your playlists and see the track names then go for a better head unit, like the Alpine.