Can the Mark Levinson Audio System on the Lexus RX350 play MP3 discs? Also, will the DVD navigation system capacity let me watch DVD movies on the screen? Let me know if you have tried.

Yes on the mp3.

You can play audio/video on the nav only when the vehicle is stopped and parking brake is on. You can listen to sound only from a dvd while moving and it will play back in 5.1 if the dvd is equiped. It's a great system except that you can't watch video while moving.