I've never used a USB drive in the car, only an iPod. But I've read that it's a little easier to search through your music, shuffle-play your music, etc. using an iPod rather than just a USB drive.
As others have suggested, you might be able to get around that by dumping all your music to the car's HDD. I don't do that because I find it easier to keep my iPod updated (since I do that regularly anyway) then I would to keep the car's HDD up to date as well.