The CD changer protocol is what the Gateway uses, so that the car can recognize it. This protocol is a little limited, therefore you only have the Next/Previous track buttons and CD1-CD6 (buttons 1-6) for controlling the music playback.
The CDs are for choosing the folders. In case of USB if you choose CD1, then the first folder will be played (based on the alphabet). CD2 is for folder #2. In case of iPods/iPhone instead of folders you select playlists with the same CDs.
The Gateway 500 Lite has no text display (ID3) function, so you can only see track numbers.
The default playback mode is CD1. If you don’t connect anything to the Gateway, then it will also display “Track 99”, meaning that the Gateway is switched to its default source mode, which is AUX-in (AUX-in can be used if you have the optional AUX-Box accessory). The Gateway 500 Lite has no menu (no text), so you can’t switch between the already connected sources. If you plug in an external source (like USB or iPod), then the Gateway will automatically switch to that source. When you plug in (or replug) the USB stick the Gateway will start to play it in “Play all” mode, meaning all the songs can be played.