Also the Pioneer uses the digital to analog processing inside the iPod to produce sound, but uses the digital to analog processing inside the X930 for am SD or USB stick. Have no idea which one does the more accurate conversion.
the D/A converter inside the iPod, is actually the better unit, this is why pioneer uses the iPod cable that they do. getting the audio out directly from the iPod give you a little better sound quality because of this. thats why all of the cheaper models(DEH's and AVH's) just use a regular old iPod sync cable to get sound. if the pioneer D/A converter did a better job, then they would have just made it use a standard sync cable.
Also, how different is playing mp3s from the iPod as compared to an SD, does it pretty much work the same way?
no, not quite the same at all, its actually much better. usb and SD cards are all filed by their folder structure, so to find any music, you need to know exactly which folder you hid it in. the iPod doesn't care about folders, it uses all the tag information stored in the MP3 to filter through and organize everything, and allows you to find any song by many different ways like looking for an album, by the artist, or even by what kind of music it is. the tricky part is, that you have to have this tag info for each MP3, which isnt a problem if you have all of your music from a legitimate source, like you actually bought it online, or had a good program rip it, but free downloads are a crap shoot, it all depends on the source. but then again, if you have album art for all your music, it should be safe to assume that the rest of the tag info is good to go.
I want to keep the iPod in my glove box will I have to press any buttons / turn it on every time I want to play files or will it go on its own?
this is how it works, you should almost never have to touch the iPod.