Long post ahead, Cliff notes:
Droid should be capable of analog audio in/out over the data port.
MicroUSB port is a CEA-936-A Compliant car kit port.
I have done some testing and have not been successful.
There are MicroUSB to 3.5mm plugs on the market that supposedly work for the droid but i have not seen any posts saying whether or not they do work nor have i gotten ahold of one for myself.
I signed up just for this. I have the same exact desire and did not want to settle on using bluetooth or pluging in the headphone jack. I did some research and found that the droid can do audio over usb, at least it is in the design. The micro USB plug was designed into the phone to be a OTG CEA936-A compliant plug. What that means is that it must do what we want it to.
The microUSB plug has a 5th pin that is not standard to the regular USB plug. the 5th pin is an ID pin. The droid uses it to tell what mode its data port is being used in. Supposedly, there are 3 modes - USB, UART and Analog. A resistor from the ID pin to ground on the cable side is what tells the phone what mode the data port is in.
In the analog mode, the D+ Pin becomes a microphone input and right speaker output and is switched by the phone (ie, the D+ pin is a microphone input when in a call and is right speaker output when not in a call). The D- pin becomes the left speaker output, regaurdless of whether you are in a call or not. The ground pin is used for the speaker and microphone negative connections.
i opened up my "multimedia" dock (what a joke) and spliced into the cable in there. i used a prototype board so i could easily change resistor values and then hooked up the D- and Ground pins to a volt meter to see if i could get some audio out of the usb port with different resistor values.
so far, i have had no success. i believe the key to cracking this is in the resistor value needed, so far, all i have tested is a 200kOhm and 400kOhm (actual resistances were 220k and 440k, go 10% quality resistors!)
if anybody has found a copy of the CEA-936-A specification book, it should have the appropriate resistor values needed to get the analog mode for the droid. from there, i would need to test to see if you can charge while in Analog mode, as that would be a final criteria needed for my project to be complete.
I found a MicroUSB to 3.5mm adapter on ebay but i havent seen any report whether or not it works on the droid. i need to make a radio shack run today anyways, so i will have to see if i can find one and report back what i find.