Musty smell can also be the cabin air filter, especially if it's never been changed. It's located behind the glove box. There are several related threads if you SEARCH for Cabin Air Filter. This one rambles a bit -->
http://forums.genvibe.com/zerothread?id=31485As noted in the middle of the thread, the arrows in this image (from the 2006 owner's manual) are the wrong direction. You actually push down, not up, to release the clips holding the cover over the cabin filter.The filters are expensive, and the Toyota Matrix cabin air filter is NOT the same one, unlike air filter and oil filters.