I purchased a used 2003 SLE from the original owner for my daughters first car. Everything was working great until today. We got in the car and I noticed the air bag light was on, the only gauges working in the cluster were the tach and speedometer, the interior lights would not dim, the xm radio would not work (the rest of the radio did). When we got to were we were going and I turned the car off and removed the key the radio would not turn off, the courtesy light around the key would not shut off and the PRND123 in the cluster would not turn off. I drove it home and pulled the fuse labeled SDAR under the rear seat and everything went back to normal. The only thing is the XM radio now does not work. Any ideas?

Your primary concern should be the fact that your Airbag Warning light was on when you did not expect it to be. Please get that fixed first/ASAP.
Answering your questions is difficult, as you did not clearly state exactly when all the unusual things occurred; after engine was started?...after driving for awhile? Can we assume that you know that ALL the dash indicators should light up when you turn your Ignition Key to the "ON" position, withOUT starting the engine. After you start the engine, they should all sequence off; every car is different, and some lights will not go off until you take a required action (Parking Brake indicator, Seat Belt indicator, et al). Do you have the OEM owner's manual? How did you know to go looking under the rear seat for the SDAR fuse? How long (weeks?months?) did everything work normally?
Maybe this will help some:
2003-2006 GM cars with SDAR (Satellite Digital Audio Radio) communicate over a "Class 2 Bus" with the optional Heads Up Display Unit, the Steering Wheel Controls, Rear Seat Audio Control System, Rear Seat Audio Entertainment (DVD/Monitor) System, and other components throughout the vehicle. I.e. - the car has a computer-style communications bus that is generally Dealer-only serviceable.
Some of the symptoms you describe could be caused by a faulty ignition switch or switch that has become mis-aligned in relation to it's actuator (the part you put your key in-to).

The air bag light is currently off. All of this happened when I started the car after it had been sitting in the garage all night. It stayed that way the entire time I was driving it and did not stop until I pulled the SDAR fuse. I have had the car around 2 months with absolutley no issues. Yes, I do know the proper sequence and functions of the dash lights for the most part all gm products are the same. Yes, I have the owners manual, don't think general motors put much about trouble shooting in there (GM sort of likes you to take it to their overpriced mechanics, lets not even discusst the tire pressure sensors on my 2012 Silverado HD). I had a new 2001 blazer that this similar issue happened with and it turned out the head unit for the onstar was faulty, so in my thinking I thought this fuse may have been for the onstar. Like I said all is back to normal with the fuse out, I even drove the car over 200 miles today with absolutley no issues. I may just leave the fuse out (I don't subscribe to xm radio anyway). I just figured if someone may know what the problem could be I might be able to check it out?

Have you tried putting the fuse back in to see if the problem returns?

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*Gone, but not forgotten* - Black 2000 SSEi, HIR Headlights, Angel Eyes fogs, 3rd brake light overlay, hi-flo cat, 180 degree thermostat, HS 1.9 rockers, LSx yellow springs, Intense FWI, PCM, shift kit, push rods, and 3.4 Pulley. ZZP Power Log.

I was thinking I should give that a try. I might try that tonight. This weekend was a free weekend for XM radio, so we were listening to that quite a bit. I don't think this would have anything to do with it, but I guess anything is possible in this day and age.

Fuse back in and no problems. Everything appears to be back to normal.

Great! Thanks for reporting back.

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*Gone, but not forgotten* - Black 2000 SSEi, HIR Headlights, Angel Eyes fogs, 3rd brake light overlay, hi-flo cat, 180 degree thermostat, HS 1.9 rockers, LSx yellow springs, Intense FWI, PCM, shift kit, push rods, and 3.4 Pulley. ZZP Power Log.