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Yes, it requires a cd in the in-dash unit to operate. That is where all the map information is stored, on the cd. I don't know the cost either, but to update I understand you need to buy an entire set of cds (~10 for the US).
2005 Ford Escape Hybrid - Titanium Green, 4WD, Appearance Pkg, Leather, Nav System
The FEH factory NAV unit is an outdated slug of a unit. I agree the Hybrid display is pretty cool, but it doesn't really do anything & you can install a FAR better NAV/GPS unit yourself.
I installed an Eclipse 5435 in dash NAV/DVD/MP3 etc unit in my 05 FEH & it is an absolutely awesome unit & looks factory installed. The Eclipse has a beautiful 6.5" screen, plays DVD movies, plays MP3 disc's, has a high powered AMP section for sound & will work with a backup camera. There is absolutely no comparison whatever between a unit like this & that factory NAV setup & it cost me less than $1000.