Yes, this is in progress (using code from VLC), but presently on rather low priority (#1 is now the full navigation). We had a simple solution that was basically removing the main window and using DVD player controlled by AppleScript, but there were many usability issues with it, so we decided to abandon this q&d approach and do the player properly.
So i was testing out the idea if my friend drops in my car and hands me a usb stick with music or video files in it how would i play them... i dont know besides opening finder dragging the files out to i tunes and the movies folder. i thought that is a bit of a hassle and kinda a drag. even most recent decks that have capabilities, automatically attach these devices and make it accessible. has this been thought of yet? Also what about videos in itunes. i can play the audio track off the video but no way to switch to see the video playing.
You can easily play music from an attached mass storage device using the "Browse disc". Current version, that we will be putting for download during the weekend, allows you to set a root folder for the browser. If you use "/Volumes/" you will see the attached storage devices.
As for the video player - we have added the "Browse disc" as well. At the moment, we do not plan to support iTunes videos. Maybe this is just my problem, but iTunes does not accept some files that QuickTime (and therefore QCar) can play without any problems. But we may re-think this in the future.