I have a Euro Prius with a 40GB hard disk included in the navigation system. 10-20 GB are reserved for music (ca. 200-300 songs). Only CD format files can be copied over (no mp3 or wma etc.). Note: Hard drive must be bigger as I already have 50 CDs copied and only 60% full. Here is how I did it: Download music from Pirate Bay or other bittorrent site. Buy Nero for $40.- (or attemt to find a free alternative) Select "Audio CD" in Nero, drag and drop your mp3 files, select all and update "meta data" (right click and select update meta data). When you burn, make sure to click "write album and artist to disk". Nero seems to have problems with converting FLAC files directly to CD format. It is best to convert first to WMA or MP3 (I used winamp) and then write the CD. Take CD down to Prius, slot in, and copy to HDD. It will (most of the time) recognize the artist, the album, as well as all the song titles.
Does this work only for Swiss Priuses (Prii?) ;-) I have a Prius III. I have been forever wanting to store MP3s directly on the radio (like your HDD) but I am not sure my Prius 3 has such a thing. Do you know?