I do not use an iPod anymore, my last iPod that I actually purchased was an iPod video 5th generation, then when I got my first iPhone in 2007, I just used it as my iPod ever since. There isn't really a need to do it any other way. A bonus is that the car charges the iPhone too, while it is playing music.
When running, or waiting for a bus, or something, the iPhone does fine for those occasions as well.