While this unit was not actually intended for the iPhone 3G, it does work well enough to use it in most cases. I have been using the Belkin Tunebase FM with my iPhone 3G since September 23, 2008.
This has been my experience...
First of all, the phone doesn't fit properly in the Tunebase out of the box. The 3G phone is thinner (front to back) than the original iPhone (1G), so when trying to use the "iPhone" attachment for the Tunebase, the 3G will teeter backwards because it's not resting on anything behind it. I solved this by placing a couple of small adhesive pads on the Tunebase which would cushion the back of the iPhone 3G (These are small spongy pads about 2-3mm thick that can often be found adhered to the inner corners of kitchen cabinet doors or drawers to help them shut quietly). The "iPhone" attachment is the right width for the 3G--IF you are NOT keeping the iPhone 3G in a protective case all the time. The naked phone will fit using the pads on the front of the Tunebase.
So, if you DO keep your iPhone 3G in a case, you have a different fitting situation to deal with. I recently purchased the Seidio Innocase II, and my iPhone 3G is no longer "naked". As it provides some "thickness" to the phone, I no longer need the adhesive pads on the Tunebase to make my phone fit properly front-to-back. Like the earlier poster shows in their photos, i had to slice off excess cushion on the bottom corners of my case so that the phone would make a proper connection when docked in the Tunebase. BUT NOW, the problem is the WIDTH of the "iPhone" attachment on the Tunebase. It is not wide enough to hold my phone. So currently i am docking the phone (still in its case) without any side-to-side support to hold it. If i have to stop suddenly or turn sharply, i would expect the phone to fall off of the Tunebase. I am still trying to come up with a way to have some side-to-side stabilization for my phone while using the Belkin Tunebase FM. I am open to suggestions, or I will post again if I come up with a solution on my own.
I was wrong in stating that the phone with case will not fit in the iPhone attachment provided. Initially it looked that way, but I went ahead and pushed the phone on down through it with no trouble. It's a good snug fit, but not difficult to remove. For me, this issue is now resolved.
The sound quality of the Belkin Tunebase FM is ok if you have a totally empty radio station to use. The Tunebase will work better if you lower your antenna, but it may not be necessary. Expect that you will need to turn your stereo volume up quite higher than usual to get adequate volume from the iPhone's music or podcasts.
Incidentally, the Belkin Tunebase FM works ok in my Honda CR-V, but works terribly in my wife's Toyota Camry. Her car has a built-in hidden antenna that you cannot raise or lower. That is the only reason I can guess for the difference in performance between our vehicles. But I can use the Tunebase in her car only as a charger.
As others have mentioned, you will get a message pop-up on the phone from time to time when it is docked in the Tunebase, recommending that you switch to airplane mode. I see this message only 1 or 2 times per month, so it isn't a big deal. You can simply decline, and the unit will work as it should. I am going on 4 months now, and despite this supposed "incompatibility", it has caused no damage to my iPhone 3G.
I simply wanted a car unit for my iPhone 3G, that would have a cigarette-lighter-mount cradle, a charger, and an FM transmitter. Devices that offer these 3 features in one unit for the 3G are rare, and none of them get very good reviews.
Probably the most widely-sold unit for this purpose is the PDO CarFM, also branded generically as the "ALLKIT". I purchased this after my newly-cased phone would no longer fit in my Belkin Tunebase FM. It has adjustable sizing, it charges, and it tunes through an FM station in my car. There are a few things I like about it, but not enough to keep using it. It does not store radio stations in memory, so you have to tune them in the unit each time you start the car. Also it's annoying to hook up the little charger plug at the bottom each time it's used. With the Tunebase, you simply pop the phone or iPod in the dock and you're ready. You can do it with one hand without looking at it--not so with the PDO CarFM, as you will need 2 hands to get set up. Also, when you turn off your engine, the music keeps playing on the phone. With the Tunebase, when you turn off the engine, the music stops. In the PDO's favor I will say that it does seem to have better sound quality than the Belkin Tunebase. However, ease of use is important to me, and I am sending it back and attempting to modify the Tunebase to use instead.
Believe me, I have researched these units at length, and although it is far from perfect for iPhone 3G users, the Belkin Tunebase FM has been the best solution for me so far. But I will keep looking for a better one...