I also have an '07 with the JBL and Navi. I bought an iPod adapter that plugs into the back of the head unit and plays as if it were a sat radio. I ran the cables into the glove box and plugged the adapter into the cable and then plug the iPod into the cable coming out of the adapter.
It allows the scrolling display of title/artist when playing. The scrolling 'box' will be over the top of whatever display you select (it sits at the top of the screen). There are a few idiosycracies with it (after starting the car you might have to turn the radio off and back on again to get it to play, stuff like that). You can use the steering wheel controls to skip to the next/previous track but navigating the iPod menus is a pain in the butt! I set the ipod to 'shuffle' and let it play.
The one I have is this one:
http://www.crutchfield.com/p_541PXDP...l+ipod+adapter and that one is listed as iTouch capable. The listed price is $99.
I happen to like the factory stereo. It provides a nice 7.1 sound stage and the overall music reproduction is nicely done. And if I'm not mistaken (somebody chime in here please), if you replace the head unit you're going to loose some of the integrated functions of the display.
That's my 3-cents worth anyway...