Answer
It is radio specific, but normally they are two differnt things.. a usb is going to look for files to play, nothing more nothing less.. ipod compatability menas the radio actually talks to the ipod. giving control from the radio to change playlists and tracks ect.. with a simple usb drive it may be more finiky, and i would suspect that it may not find all tracks only those in a root directory.. but this is just a educated guess, i have a computer background and i am a audio nut, but i have not actually used several decks with a ipod to know for sure 100%.