Yes, that's the "stock" location for the batteries. I did add a blue seas add-a-battery in the observers compartment too. I'd definitely be wary of batteries and ballast sacks in the same compartment. look at genuinedealz.com for marine battery wire. Prolly need 2ga. Buy the more expensive stuff. The special budget wire is really inflexible and hard to work with (ask me how I know....)
esprit -- yeah, once you pair the iphone / touch to the HU, the HU will play whatever the phone tells it to. So in addition to playing stuff off of my ipod, I can also stream pandora, slacker, etc. Actually took a call on it yesterday while I was working on it too. This headunit has bluetooth built in, so there aren't any other components. I have noticed that streaming BT is a huge battery drain on my iphone (doubly so if streaming pandora), though, so I've made arrangements for plugging the phone into a charger too.