I know that I am repeating things said above, but will try and put it all in one perspective. There are several ways to listen to your iPod in your car - and I have tried most of them:
1. Tape adapter. Sound quality is medium - better than FM transmitters but not as good as hardwiring your iPod. The cheapest solution of them all. I have seen tape adapters as low as $4 USD at WalMart. Obviously works only if you have a cassette player in your car.

I use this in my wife's car whenever I am driving it. She does not want to be bothered with an iPod, so I have not hardwired her car.
2. The iTrip. It is best of all the FM transmitters. But it is FM at best and static at worst. Not good for metropolitan areas. I live near NYC and always had a tough time finding a clear station. I used an iTrip for about 4 months. It will run you about $35 new. Used ones can be found cheaper (eBay). Best is to borrow one from a friend and try it out to see if you like it. The iTrip is great for portability. All cars have radios and I find it very useful when using friend's cars and rental cars. The iTrip does suck power much faster, but that can be fixed with a car charger.
3. Hardwire the iPod to your car. This is the most expensive but the best solution. I have done this for my daily driver (99 Civic) and would have it no other way from this point. My cost was ~$90, but your's can vary depending on what you have and what you want. If you have an auxiliary input in the car audio system - then you don't need to do much at all. Otherwise, you can get an adapter that convert the CD changer port (in the back of your stock radio) to an auxiliary line-in. It is not really difficult to do - I did mine in about 45 minutes! The Ice-Link is the premium version of this and will allow you to control the iPod through your car audio system.
4. The best way is to buy one of the latest BMWs and get the dealer to hardwire your iPod. Now this is one solution that I am yet to try.
Hope this helps. If you have the time and money go ahead and hardwire your iPod - as good as CDs. I got most of my info at
www.ben-johnson.org/blog/index.php?p=37. There are other posts at ipodlounge.com also.
You can PM me if you need more help.
Cheers
St S.
