The Peripheral Electronics adapter provides the ability to keep the factory XM, add iPod, and add another auxiliary input (comes with RCA jacks, 1/8" jack input) or you can add their HD Radio tuner that plugs into the the auxiliary input.
You might contact them to see if you could use a second jack set in the iPod port. The company is very responsive to questions. Their website page for contacting them is
Peripheral Electronics