In the brochure for the '05 S2K it says that the "standard audio system is prewired to accept the dealer-installed accessory XM Satellite Radio hardware." Does this mean that the all the dealer has to do is install the antenna? I understand that I will have to pay XM for the monthly subscription.

No, I think you have to by a receiver, check your honda dealer

Also check into third party radios. My S2000 has a Pioneer XM unit.

These days you can get radios that read MP3 files and even have a DVD /Navigation panel. Check around.