Yes it does recognize USB but with issues... limited to only 2500 songs, indexes every time you start the car (can't change tracks, etc while it's indexing), doesn't remember settings such as random, doesn't remember previous playlist (e.g. if you were listening to an album). So yea, it works but it's kinda annoying. All of this is true with any device but an iPod as the car lets the iPod handle everything and just gets the analog audio from the iPod (everything is controlled from the head unit/steering wheel though).
(Plagiarized from previous post by UCFw00T)
Lot's of good info in this thread
http://www.camaro5.com/forums/showthread.php?t=44120