An eletrical engineer friend of mine and I have discussed this for months now, but we have not had the opportunity to "play" with an acutal unit. We believe that it converts the signal, because if it didn't then you wouldn't have to buy a tape module you could just splice into the connector and go from there. If the signal is only analog, there is another problem though. There is some communication between the tape module and the head unit. I'm not sure what all goes to it, but part of the tape player mod is you have to insert a tape in the tape player (either a blank tape, or cut the cord from a tape adapter). You can't just rip the tape out of a tape, there has to be something there. Also, if the tape module is not attached nothing happens when you hit the tape/MD button, so the head unit must either use some type of communication protocol (like Pioneer's IP-Bus maybe) or maybe it's just the completion of a circuit that turns on the connector. So here are our conclusions: To create an aux-in something would have to "trick" the head unit. Right now the easiest way to do this is the tape player. It also works for the mini-disc module, but the tape module is cheaper since you're sacrificing it anyway. Best case scenario is that the audio input is analog and you could just complete the circuit on the connector to get the head unit to recognize that something was there. But it is our opinion that at the minimum something would have to "talk" to the head unit to accept an analog audio signal, if the signal isn't digital. This would require a significant piece of hardware and it would be extremely difficult to reverse engineer a complete protocol