A lot of high-priced car stereos come with onboard hard drives. When you put a CD in the player, the stereo automatically copies the songs onto the drive, letting you store, say, 20 gigabytes worth of tunes in your car.
With Sync, you supply the hard drive that you plug into the system, whether it's a portable mp3 player, a cell phone or a thumb-drive.
The lack of hardware keeps the price down, and if you've already got MP3s on your iPod, why save them again to your car?
But if you're not the type of person who knows - or wants to know - how to rip MP3s and save them to a cell-phone or music player, a hard-drive based system might be easier for you to deal with.