I have a 160gb iPod Classic that stays in my armrest at all times, album art works great too. I can also connect my iPhone via Bluetooth or using the Media Cradle if I want to listen to tunes that way but 99.9% of the time it is via iPod.
Current: 2013 Mercedes C63 AMG Sedan Magnetite Black / designo Porcelain/Black Leather
RIP: 2011 BMW M3 Sedan Alpine White / Fox Red Novillo Leather
Past: 2008 BMW M3 Sedan Melbourne Red / Black Novillo Leather