Please note that without a strong terrestrial signal, no current "portable" players are truly live portables. The XM offerings are good in places, awful in others.
How the S50 gets around this is it lets you save songs (by pressing a button) and/or record shows via schedule recordings or on the fly. It also automatically records your 3 favorite (most listened to) music channels, allowing you to save songs from the recordings later. It also is an MP3 player, letting you download mp3/WMA files via the included software. You then remove the "player" portion from the dock and use that as your portable.
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Don’t understand why it has a screen unless it downloads from certain websites.
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The S50 has the capability for firmware and screen logo/voice menu/wallpaper updates via the Sirius website, so yes it can download. The full color screen is just a nicer version of the 2-3 line information screen you see on most satellite radios. It displays the channel name, the show/song name and any scroll information (artist etc.) that may be on. Each genre has an appropriate wall paper and each channel has a voice menu for easy navigation.
Note: Early units can be described as buggy, but a 1.3 version of the firmware is going to be released by the 20th which claims to fix a major portion of the bugs and also add enhancements.