That is incorrect. If you are playing a DVD through the stereo you wont be able to listen to anything except clifford the wiggles and finding nemo
. However once you get the wireless headsets you should be able to listen to anything CD's, XM, AM, FM, everything. Just for your information the rear radio console is not tied to the DVD player, only the stereo.
The way the rear stereo works can be explained by giving you a scenario: people up front are listening to ESPN on XM stereo, the people in the back with wired headsets can A: listen to anything they want on FM bands or AM bands, however if they want to listen to XM they can only listen to the channel being played on XM on the main head unit. Likewise, if the people up front are listening to an FM rock station the people in the rear can listen to Disney radio on XM but will be bound to whatever FM station is being played upfront.
Atleast this is the way it works on my Denali.