Yes, that controls the UConnect, and I believe because you have the second (smaller) plug you have the DVD/Entertainment package, correct? If you unplug that you'll loose your hands free capability but your stereo should still work.
Look on ebay, you can get a replacement module for fairly cheap, around $40-50.
Keep in mind that module links up to your overhead console (for power) and rear view mirror. If you're getting a power draw associated with the UConnect module check out those two locations too.
'06 WK 65th Anniversary Edition 4.7L V8 4WD QT II - aFe CIA (54-12602), Flashpaq Tuner (3872)