Hello,
Here are 2 videos I spotted on youtube that shows the functions of GMs iPod Personal Audio Link (PAL) and a straight Radio USB port for playing your own music.

GM iPod Personal Audio Link

GM USB Radio

The USB port in the Cobalt is in an odd spot?? I like the right side in the HHR way better.

 

Pros and Cons:
GM Personal Audio Link:

Pros
1. iPod is hidden.
2. Works with most iPods
3. Charges ipod and turns off when key is off.
4. Nice looking interface.
5. More options to select in menu.
6. Hackable? People on the C5 forum are updating thier firmaware.
7. Works with steering wheel audio controls.
8. No programming of the BCM *SEE BELOW **
9. Is from GM

Cons:
1. Have to drill a hole for iPod cable in glove or center stowage box.
2. Very slow when scrolling thew songs, sometimes locked up on me. iPod size did not matter.
3. HUGE wire harness plugs in between the radio and PAL module.
4. Need to tap into fuse box for power source.
5. Need to reprogram BCM only if you have XM
6. Pickey with newer iPhones and iPods.
7. 7 year old technology

The PAL has 2 RCA input jacks? I dont know if this is good or bad.


GM USB radio

Pros:
1. GM Stock radio head, very clean.
2. Very fast when scrolling threw songs.
3. Accepts (some) USB thumb drives.
4. Works with steering wheel audio controls.
5. Works with iPods and iPhones.
6. Charges iPod.

Cons:
1. Very pickey on which thumb drives will work.
2. iPod is in open. Cables wise.
3. May have to get radio reprogrammed if bought used.
4. Basic music menu. no search function.
5. 4 year old technology

I dont know the size limit for Thumb drive. Curenty using 32GB.