The unobtrusive DLO Tunestik works nicely, and comes with a little remote that attaches to your steering wheel. Also nice because the Tunestik includes a "pass-through" dock connector so you can still connect a cigarettte-lighter charger to it as well. I bought it for the remote...I found the lack of real buttons on the iPhone made it more difficult (and dangerous) than using an iPod in the car.
I actually have a direct line in to my car's head unit that plays the iPhone via my car's CD inputs, but I have tested out the Tunestik's FM capabilities. It works fine for me over the usual 88.5, but the line-in sounds better and also lets me use the iPhone hands-free when I get a call. The Tunestik interface that lets you change the radio station does not work on the iPhone screen. You might have to hook up an iPod to change the radio station if the default 88.5 doesn't work well, then switch back to the iPhone. All the other buttons on the remote work as expected, I wish I would have had this for all the years I drove around with iPods, but I think it's a must for the iPhone.