1. I also did it without buying the converters - basically, it involves hacking off one of the plastic connectors and keeper the wire/plug inside - which then fits straight into the back of the unit. Not as secure as a proper converter/plug, I'm sure, and it did feel kinda wrong doing it, but it works perfectly well, and has done so for months.
2. No playlists available, but I have organised my folders into artist, then album. I also have a 'launch' track in the root. I use the launch track to randomly play tracks from anywhere in my collection - the trick being is that it will only see tracks in sub-folders from the track you start playing, so the one in the root does the whole HD. If you want to randomize within an artist, just go to that folder and play a track from there.
3. There's instructions on changing one of the connector pins for the ipod attachment so that it works with the RNS - I don't use mine either, but I did the change while the dashboard was in apart just so things are 'right', and I suppose the fact it works will help re-sale one day...
4. I used 4Gb SD cards to transfer my music - be aware that it takes quite a while! It's also good to transport new MP3's that you have - as well as copying them to the HD, I play from the SD (same principle with randomizing!) so I can easily listen to my new music when I get it.
5. The Sat Nav (particularly with V4) is fab, and very easy to use with touchscreen - I know it does some degree of postcode searching, but I've never felt inclined to use it.
Make sure both aerial cables are connected properly - I bodged mine a bit first time (before I took the adapter apart), and thought that the radio signal was just a bit weak. It was only that I noticed that I wasn't getting TMS that I realised one of the cables wasn't properly plugged, and that I was missing out on some great functionality.
Great price, btw - I paid £900 for mine some time ago, but even now consider that good value for money.