I have XM in my car and I love it. Great variety and sounds great.
If you are going to upgrade your head unit, then get one that is XM ready. This way, you get a better sound quality, and can control the XM reciever with the head unit, as opposed to having a separate control head (to fit/hide somewhere) to control It.
I have an Alpine setup (XM "ready" head unit and separate XM reciever) and it sounds as good as a CD. The receiver is mounted in the trunk area, separate from the HU, and plugs into it via an Alpine serial type cable. The HU controls the XM as an additional band on the radio. It's pretty slick, with all of the presets and my steering wheel controls control the whole thing. I even mounted the antenna (about the size and shape of a computer mouse) IN the spoiler on my car, to completely conceal the fact that there is something worth stealing in the car. So far, the tsA thieves in MCO have left my car alone....
If you want to use your existing head unit, most of the add on recievers use RF (on an unused FM freq) to transmit the signal to the head unit, so the sound quality is supposedly not as good (my friend has this setup, and if you ask me, it sounds fine). The downside to the add on units is that you have controller connected to the reciever that you have to find a place for. I am sure that there are some that use a line in, RCA type connection as well.
XM is commercial free on the musis stations only! The comedy (150) channel, which I listen to a lot, still has them (and it seems like a LOT more than before they went commercial free on the music stations) as do all of the news stations. Still XM is limited to 6 minutes of commercials an hour, which is MUCH better than the typical FM norm of 15 minutes per half hour during normal listening hours.
They send a turn-on code to the radio. If you don't pay, you get 5-6 free channels to listen to.
IIRC, you send them the number from your reciever, and then you leave it on for an hour or so, which activates it. The "free" ones rotate every day, so, one day you can get the boneyard, the next day, church music, the next day gangsta rap etc. FWIW, when I signed up after Xmas '02, it took a few days for my system to be activated, due to heavy volume.
I drive 3 hours each way to work every week, and I can say without ANY reservation, that XM is worth every penny I've put into it.