They're no where close to CD sound quality. At best they're FM comparable and after a few trials I disagree even with that. I actually got headaches after listening more than two hours. XM is putting out I think ~32 AAC+. That's not even 128 kbps MP3 (usually rated at ~48 AAC+). Sirius is similar. I've seen tests say either is superior in the sound department, but I think the differences are minor. I really think you should look at the programming and content to decide. Most here seem to discuss XM (it certainly has the better home deck with the Polk), but I'm firmly in the NPR/BBC/Stern Sirius camp. If you're considering the latter I suggest you look at the Starmate Replay (has newest chip).
Most current PNP systems on both have FM transmitters, so you can either use that to your car stereo or plug in directly if you have a jack. There are obviously car stereos you can buy. The PNP have, depending on the model, either a dock with a jack or a mini jack on the unit which you can plug into your home stereo with a $5 Y mini-RCA adapter.
If you want to visit fan sites to get the low down of each go to:
http://www.xmfan.com/
http://www.siriusbackstage.com/
Again the price, hardware, quality and complications (antenna, reception, etc.) are similar enough that I really think you should look at the content of each to decide.
An independant guy set up
this site is you want to see what's on the Sirius channels at any one time. There may be something similar of XM, I just don't know it.
I just gotta state again that the sound quality isn't going to be steller. You shouldn't consider this a step from rabbit ear broadcast TV to cable. It's more like rabbit ears to rabbit ears with content you may prefer. I (and at least one other here) tried and dropped the service (me Sirius, he XM)because of the quality. I'm considering giving it another go and see if my expectations were unfair. It's not like some of the content you can get anywhere else.