Can I install the Motorola T605 with the AVIC-D2 or will there be some compatability issue or something? I know someone here told me that I can't install the Pioneer Bluetooth connection so looking for an alternative.

You shouldnt have an issue with the pioneer bluetooth on the d2, but for the aftermarket bluetooth you have to have an available mute wire. I am not sure if your d2 uses the mute wire in a bypass, but you need it.