My SONY car stereo plays non-DRMd AAC tunes, as does my wife's BlackBerry and, I think, my old Nokia.
Why not? AAC is a non-Apple music format, as "standard" as MP3.
So here's the mystery. Why don't the iPod's competitors (not least the Zune) support AAC? I don't think it's that costly to license.
At the Target store, for example, I found a Creative Zen player with AAC support. On their web site however there new "ZEN Mosaic" lacks AAC support. You have to dig down to learn that the ZEN X-Fi and ZEM do have AAC support.
Sandisk has no AAC support in any model.
We have very little DRMd music, but a lot of AAC encoded media. I'd consider a ZEN player for my daughter if it were half the cost of a Nano.
So why so little AAC?