The iPod connector seems to have become the standard interface.
However, the iPod form factor continually changes, so it's kind of hard to make an "iPod-shaped hole" to insert it into.

That being said, does anyone know if there are any current car stereos where you can just plug in USB, say for instance, a USB thumb drive with your music arranged in folders?

That would be cool.

But I'm sure it would give the RIAA fits, since it would give you control over the music you paid for. And they don't seem to like people being able to do what they want with their own stuff.