According to CrunchGear's sources, the AppRadio is designed to interface exclusively with iOS 4.1 devices (meaning Android and Windows Phone 7 users are left out in the cold) and runs a UI that's remarkably similar to the iPhone, iPod Touch and iPad (we'll see how Apple's lawyers take to that). Pioneer is developing apps for the head-unit, including Pandora and iHeartRadio, while the standard Bluetooth connectivity, AM/FM stereo, MicroSD slot and GPS functionality are also part of the package.
There's no word on price or availability yet, and since the specs don't include a modem, the AppRadio will pull data from your iPhone. We'd expect an official announcement before the end of the year and should see the hardware in person at the next CES.