I've got the Kenwood DDX812 and the optional nav unit for it (which makes it pretty much identical to the DNX8120 and for the purposes of this discussion, completely identical).
With a smallish USB thumb drive (I've got an 8GB drive that I picked up pretty cheap the other day at Officemax), the user interface for selecting artist, album, song, etc. is great. It's very quick to build up the initial list and easy to navigate.
However, with a much larger 120GB Western Digital Passport drive that's pretty much filled, it takes some number of minutes before the Kenwood finishes loading the list, it truncates the list of artists (at around 214, which I suspect is the published limit of folders within a folder - reorganization by grouping artists into genre or A-Z folders should help that), and seems to be sluggish.
I've also tried out the iPod interface, but only with a 2GB Nano so far (my older iPod Photo 60GB isn't compatible). With the Nano loaded up, the iPod interface is blazingly quick and loads right up. I'm hoping that it will be (nearly) as quick with a larger iPod as I'm figuring on getting one of the new iPod Classic 120GB models. If anyone has used the current Kenwood HU's with a large iPod with 5000+ tracks, I'd be interested to hear how fast the user interface is.