Here is what I discovered.
After much trial and error I have found the steps that I must take to make the USB and the Bluetooth work together. It seems that the iPhone sends music over the "last connection it completes" So if you have Bluetooth and USB, hook the USB up last and it will switch to that. Hook the USB up before the Bluetooth connects and it will switch to Bluetooth when it connects and kill the audio to the USB port.
Here are the steps.
1. Start car
2. Wait for Bluetooth to connect
3. Plug in USB cable
4. Pandora will start to play thru the USB connection.
Caveat #1: In order for Pandora to start automatically it must be active on your iPhone. Not open on the screen but active in the dock, otherwise your iTunes library will start to play instead.
Caveat #2: When Pandora starts to play over the USB it will play the last station you had set, but you will not be able to change stations from the controls on the dash UNLESS you tap the Pandora icon on the iPhone first. Once you tap the icon Pandora will go into accessory mode and you will have full control from the dashboard from there out until you turn off the car.
If it were not for the fact that I want my phone calls to go thru the Bluetooth I would just use the USB only, but USB won't pass calls thru the car speakers. If you turn off the Bluetooth then USB works perfectly with no steps at all, just connect and go.