Nope, that's not how the USB connected head units work; if you stick a USB bus analyzer on there you will see the decoded audio as an isoc USB pipe. The DRM stuff all stays within the iPod, as does the database etc.

Rob's stuff mounted the iPod as a drive then indexed and played the files just as it would from (eg) a thumb drive.

Things like the Bose iPod dock just talk serial to the iPod and use the line outs - no need for them to be talking USB as they don't need to provide music navigation, display album art, etc.

Hugo