I am pretty sure number 1 will not work, but that is based on never trying it. Someone else might be able to help with that. Number 2, while using the navigation, any AV source, including the iPod will work. I use my iPod, XM as well, and it still plays when I enter, view, scroll, whatever, any aspect with navigation. It mutes when the lady gives you directions though, which is good. Hope that helps.