Yep. But GM is offering a free upgrade if you sign a 3 year contract: Other manufacturers may be offering similar deals. Details at
Q8: If my GM vehicle is capable of being upgraded, what is the process for having upgrade equipment installed?
A8: Digital upgrade kits are now available for some GM vehicles. Upgrades for these vehicles will be provided to OnStar subscribers at no charge with the purchase of a nonrefundable, 3-year OnStar subscription. To arrange for an upgrade or obtain more information on digital equipment upgrades, please contact your local GM dealership or call OnStar toll-free at 1.888.206.0031.
Interestingly, OnStar units from before 2000 used a handset style cell phone and cannot be upgraded.