This question is answered right here in the other thread:
http://www.head-fi.org/forum/thread/504567/hm-602-portable-music-preorder#post_6814838
This question is answered right here in the other thread:
http://www.head-fi.org/forum/thread/504567/hm-602-portable-music-preorder#post_6814838
SD cards seem to be supported indeed.
edit:Gapless is not currently supported, but is it planned with a firmware update?

Pre-order anyone? http://www.head-direct.com/product_detail.php?p=90# & http://www.head-fi.org/forum/thread/504567/hm-602-portable-music-preorder#post_6814613

thanks for the link hero
I've just sent off an email to Fang with a kabillion questions about the 602 and depending on the answer I think I might purchase one! 
Of course I'll do more research but at this early stage without having my questions answered its pretty much impossible due to the limited information at hand.
The two big things I want to know more about is;
I just preordered and paid for mine.

The USB DAC implementation in the HM-801 isn't very good. The chip used in the 602 might be better with USB. When used with S/Pdif, the 801 is comparable to most entry level DACs I think, but it can't hold up to a full sized PCM1704UK based DAC. In the case of both the 801 and 602, I think its best to buy them for their all-in-one portable abilities first and as a DAC second.

I've just sent off an email to Fang with a kabillion questions about the 602 and depending on the answer I think I might purchase one! 
Of course I'll do more research but at this early stage without having my questions answered its pretty much impossible due to the limited information at hand.
The two big things I want to know more about is;
Well I can answer your first answer with yes. A lot of things are better than the Clip+.
I always wondered why DFK(?) posted that big post that stated the Clip was better than the other players with the frequency graphs being the main point of the article. Frequency graphs tell you NOTHING about how "good" the player sounds. You should use them as a slight guideline but IMO you should never base a purchase off of them.

Well I can answer your first answer with yes. A lot of things are better than the Clip+.
I always wondered why DFK(?) posted that big post that stated the Clip was better than the other players with the frequency graphs being the main point of the article. Frequency graphs tell you NOTHING about how "good" the player sounds. You should use them as a slight guideline but IMO you should never base a purchase off of them.
I hate people who state that graphs and specs are everything, makes me wanna strangle them.
Yep yep. I wonder if there is a way to actually graph things like detail, soundstage, etc. Of course it's kind of... subjective but I'm sure you could get some things like soundstage down to rough numbers or a graph...
For example people said that DacMagic's usb input is jittery and it probably is but I preferred going usb from my pc than spdif out from my onboard even though the spdif should be better speced.
I'm the last person to tell someone to buy based on FR or THD specs, but the jitter levels on the DacMagic's USB input are measurable, and they are pretty awful. It sounds passable through USB, but hook a good transport up to it via S/Pdif rather than onboard sound from a PC and you will prefer that by a large margin.
The HM-801 to my ears sounds best when playing from the SD card, then via coax, and then USB last. Like the DacMagic it's passable via USB, but if someone has $800 to spend and just wants a USB DAC, there are much better choices.
The thing that newbs have to understand about both the HM801 and HM602 is that they use non-oversampling DACs, and that there is controversy over them. That's something people have to do their own research about and make up their own minds, but they need to be aware of the differences before making up their minds.
Ypoknons, is the HM801's PCM1704 DAC implemented as NOS? It has the capability to oversample. From Stereophile magazine:

I'm the last person to tell someone to buy based on FR or THD specs, but the jitter levels on the DacMagic's USB input are measurable, and they are pretty awful. It sounds passable through USB, but hook a good transport up to it via S/Pdif rather than onboard sound from a PC and you will prefer that by a large margin.
The HM-801 to my ears sounds best when playing from the SD card, then via coax, and then USB last. Like the DacMagic it's passable via USB, but if someone has $800 to spend and just wants a USB DAC, there are much better choices.
Yes it works best with a transport-i use the Onkyo dock
I asked Fang a bunch of questions regarding the 602 and his answers are above in bold. It certainly helped me.
As for the NOS DAC I did some research and I finally understand what "NOS" stands for and what they mean in terms of sound.
I'll have to research more and find out what type of DAC my other players use to see if it'll bother me. At the moment I'm wary about the synergy with my incomming SM3s and the 602 but I'll see.