Well I found my answer after digging in the Owners site finding the accessories chart. Here is a screen capture:
http://farm4.static.flickr.com/3225/280933...365d95f.jpg?v=0
Look at 2nd to last footnote.
Who knows maybe there will be a reverse compatible solution in the future short of an entire NAV system replacement with an extra iPod/MP2 device or a HDD to download the iPOD tunes and sync. (Check out GM - CTS) Disappointed, I would have expected more from Lexus/Toyota R&D folks. Maybe LexTech has some insight. Fortunately I am not an iPOD freak but it would have been nice and to be locked out of an option like this because one has chosen SAT radio is a bit bizzare. Guess I will just be relegated to the AUX audio input and jack up the ML volume :(