Yes, the stock CD player can be upgraded. I upgraded mine to a Kenwood in-dash CD/MP3 player that also has a satellite radio tuner (Sirius) built-in to the unit. Bought it from Crutchfield because they sell you the other accessories that you need, plus they give you car-specific instructions. If you change your in-dash unit you will likely need a new radio housing (the trapezoidal-shaped thing that holds the radio and the storage compartment below the radio); Crutchfield has that as well. They have a number of units that they say will fit the HCH; check out their product offerings against the list of requirements you'd like a new radio to have.

I'm very pleased with the upgrade; CD/MP3 playback is great, and even the FM reception and fidelity are improved. I have made no changes/upgrades to the HCH speakers so far.