I have the AVIC-N4 in my Escalade and it works the IPOD and IPHONE perfectly. Sound, videos etc... It even shows playlists etc on screen. I have the AVIC-N2 in my car and it doesnt do s**t, it plays sound but you cannot tell where you are in the IPOD or Iphone. I am upgrading it to the AVIC-N5, next week.
Just my 2 cents. I have the N2 in my car and I also have the 160gb IPOD. On the N2 the IPOD controls are very limited. Now I have the N4 in my truck and its awesome, much better controls for the IPOD including; playlists, albums, artists etc... and it even plays videos/movies ... Plus its bluetooth with my Iphone so I can talk through the truck stereo!