I have about 20 CDs that I recorded from my collection that I keep in my car. They are recorded on a variety of different brand CDRs. Occasionally, i would get one to work on the factory head unit but there was absolutely no pattern. The same brand would work once and not the next. As far as I know, you are limited to the two choices of MP3 players you mentioned. Some have said that the Clarion Auto PC works, but that is twice as much as the Kenwood.
I wish I had better news because I am looking for something similar.
Dave
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99 SVT
Sony ES CDX-C910
Sony Digital EQ/X-over
Sony Changer
McIntosh MC440M
Adire Audio Shiva
MB Quart/Vifa seperates