How to play MP3 on my 2008 Prius

You can also play a CD that contains MP3 file. It wasn't clear if you were thinking of that.

 

There's a couple of ways you can skin this cat.

My 07 plays it right from the CD, but if you want to be able to use a USB or Bluetooth here are a couple of ways you can accomplish this:
Plug n play:

Bluetooth Options:
El Cheapo but works:
Bluetooth Kits Hands-free Stereo AUX Adapter Interface For Toyota Lexus Scion 701722893702 | eBay

Premium:
Toyota Camry Stereo: GROM-BT3 Bluetooth Car Kit Demo
or
USA-SPEC BT45-TOY BLUETOOTH MUSIC & PHONE INTERFACE FOR LEXUS TOYOTA VEHICLES 824254900073 | eBay

There is also a legacy USA Spec BT35-Toy that uses HFP

USB flash drive:
Digital USB MP3 Aux 3.5mm Audio In Adapter Interface For Camry RAV4 MR2 Prius | eBay

Bluetooth audio notes:
There are 2 DOMINANT protocols for bluetooth streaming audio HFP (Hands Free Profile) and A2DP (Advanced Audio Distribution Protocol)
HFP is mostly going to be found on the less expensive units. A2DP is going to sound like HD audio compared to HFP - but HFP works.

 

In my 2008 prius the previous owner had an
TranzIt BLU HF installed. This required pulling the trim out to access the back of the screen/radio. Blue tooth is decent (you connect to a designated radio frequency to connect), so I'd recommend getting something similar ( there are videos on youtube to show you how to pull the trim apart) because those include a separate mic for handsfree calling,or you can try getting the plug in ones, maybe the more modern ones are just as good.

 

My thoughts are if you are gonna pull trim off - which ain't that difficult - then get real integration like the ones that use the AUX/CD changer method. You get steering wheel controls and smooth integration like it's factory.

The USA spec version and Grom Versions are seamless factory like integrations with excellent call quality. I even use Siri/ok google on my install. They also support Text display from my podcasts and iTunes library (don't know about spotify) but it should be have similarly.

The cheaper ones that emulate as a CD changer may just be numbered tracks but I can't be certain.

The no name chinese ones that come with a mic also handle phone calls but quality won't be as good as the top tier USA Spec or Grom versions but 1 annoying thing about the chinese ones are that handoff and transition of phone calls, in my experience, usually result in a Drop/Disconnect i.e. handoff from Phone to entering car or Start conversation in car and exiting car to phone. Other than that the audio quality will all be pretty good provided they use A2DP.

Oh I found a couple of other integration ones:
Crux BTSTY2 Bluetooth Streaming For Toyota & Scion Vehicles 2003-2010 | eBay

Car Bluetooth MP3 AUX Adapter Interface Kits For Toyota Lexus Scion 2003-2011 | eBay

 

There is an application that supports downloading mp3s from Soundcloud that you can refer to, which is Soundcloud Dowwnloader.

 

Take the stereo WMA player out of another Prius My loaded model allows me to plug in a cable in the glove box that'll play over the auxiliary I don't really like Bluetooth as sound quality can be well not. It's just another radio I like playing from a little preamp through a 3.5 phoneo cable physically at least I have a chance at having some decent sound.