FM transmitters are definitely versatile, but also tend to give pretty low quality music. Going from FM transmitter to direct Aux-In makes a huge difference to the quality of music reproduction Having said that, if all you're after is scratchy radio-quality music, it may not bother you.
50LTRv8, I've had a quick look around on the net and apparently you're correct - some head units don't supply enough power through the USB post to power a portable hard drive. That's a little disappointing, but take heart - flash memory just keeps getting bigger and cheaper. Or you could just buy a JVC head unit that does support a portable hard drive.
Just a quick question to those who chirp about the capacity of their iPod or whatever - do you really have 160Gb of music you want to listen to? I have one MP3 DVD-RW of music (4.5Gb) that contains every song I want to hear, and there's still plenty of space left over....I am a little fussy about the music I listen to, but even if I wasn't I'm not sure I could fill a 8Gb USB stick, let alone 160Gb.