(1) Will the Bose speakers still work with the pioneer unit?
Should..Anytime you install an after market head unit, you also will have to buy a compatible factory vehicle harness that makes hooking the unit up "plug n play" so to speak. So you marry the Pioneer Radio Harness to the Factory Harness wires compatible with your vehicle...Example:
([Z120BT Head Unit]) <===> Pioneer Wire Harness <===> Purchased Factory Wire Harness <===>Tahoe Existing Harness Plugs
(2) XM Radio was factory installed with the car. Is this factory XM radio compatible with the Avic-Z120?
No...The XM Radio Receiver for the Z120BT is proprietary and uses specific cables that interface with the XM Receiver and Pioneer Head Unit as well as its own antennae. The Pioneer XM Radio Receiver is purchased separately (Product link below)
http://www.pioneerelectronics.com/PUSA/ ... GEX-P920XM
You could always call a Crutchfield Technical Advisor or a Car Audio Installer (Not Bestbuy) and they can answer those questions for you very easily.
Peace ~ HFoM