D1JL, I believe anyone who uses the much nuch higher capacity HD option should to side-mount.
There are a ton of factors when it comes to MP3/WMA/AAC/etc sound quality. On playback and depending on the equipment, sound source, you may not hear any difference between the "lossless" AAC format and MP3, or will hear a TON of difference between two identical bit/sample rate MP3 files.
The A/D and D/D conversion plays a large, very large part in quality. For example the freeware "LAME" MP3 encoder sounded absolutely terrible versus that which you'd purchase from Fraunhofer. Many people don't know this (or care) and use the freeware versions, then condemn all compressed audio formats as "horrible". I've encoded the
same tracks using different encoders on the same software, bit/sample rate, and played it back using the same program. While one encoder indeed sounded (no exaggeration) horrible no matter the bit and sample rate, the others sounded anywhere from decent to fantastic. The main difference between the "decent" and "fantastic," was in the dynamic range and "masking." There was some decrease in dynamic range and subtle background detail may be cut-off by the "masking" filter, but these are details you'd mostly only pickup on headphones or in a quiet environment. Driving in a noisy car you're not going to notice the difference.
The D/A conversion also plays a large part. Whether the power source is limited (battery) or dirty (A/C - DC conversion) they can cut into the dynamic range. Quality D/A conversion and post-processing, oversampling/anti-aliasing along with a well programmed DSP can compensate for some of the "pixelation" and bring out most of the background detail within the audio stream. You're not going to get out more than was put in, but imagine how visual filters can smooth out rough edges, sharpen a blurry image or accentuate subtle details within an image.
Some folks I've notice also go back to an era where we had trained musicians and lots of live instruments. Now amateurs rule and live instruments are a minority. There is a monstrous difference in sound quality between live performances using "real" instruments and live bands as opposed to the pieces that are composed from a zillion different compressed sample reproduction/simulations of live instruments from untrained artists; and of course some genres enjoy 100% synthesized sounds not recorded from any instrument.
Ford should dump Sony and go with a North American based manufacturer, Alpine, along with SRS programming for DSP processing. The SRS component that was added to the old Windows Media Player that ran under Vista is absolutely phenomenal. But I know Sony and they undoubtedly convinced Ford to be 100% exclusive to them for the next 360 years or get sued for everything they're worth. They're also probably behind the decision to keep the late 1980s slot-wart / cell phone mount holder on the dash too.