Yes I have the USB in my X1 and a stick just works great! You can change tracks from the steering, or change (depending on how you've arranged the files on the stick - I've created folders by Artist, then sub-folders with Album names and the tracks within) albums on the radio. Displays track names as well.
In fact I haven't bothered to test my iPod yet. For my phone I ordered the basic 6NN Bluetooth hands-free option i.e. without the cradle. Still stores my phonebook on the radio, and can still make/receive calls with the steering.
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