still haven't found what I am looking for
I was looking for the same thing. I did not find a solution for me, but I will post my finding in case it helps someone.
I have a "high end" Bose stereo with a in dash cd changer and a cassette player. Long story short, there is no easy way to add a line in ( done my research). The cheaper solution is to get an aftermarket stereo. I don't like most head units out there: they all look really chessy: tiny buttons, plastic, awful led lights. Alpine makes a few that are more of my taste. There other large screen units seems to take a couple of minutes to boot, does navigation as well, but cost $1000 or more. Thieves magnet I think.
I tried FM modulators. None worked for me. And if you search, many people find them to be awful.
I wanted to be able to safely answer a phone call while driving. Bluetooth headset is not the answer because I often forget them or forgot to charge them, and I really don't want to fumble with a wired headset while driving. So I tried a few bluetooth speakerphones. The first one was crap.
Then I got a Blueant ST3 (the current model is ST4). It sounds great. The rechargeable battery lasts about a month for me. It will even voice dial with the iP4. Best of all, it demands no attention until I get a call, then it announces the call name at which point I could either push a button to answer or push another button or do nothing to reject (you also can answer by saying the right word by I never bothered with that). Its voice dial is great. You don't have to train the unit at all yet the accuracy is uncanny.
Even if I got a stereo with hand free option for my phone, I suspect I would still use my Blueant speakerphone. The reasons: I don't want to have to remember to turn on the stereo every time I get into the car just so that it's ready for my incoming calls, the same way I don't automatically turn on the stereo or TV when I get home.
For now I am using a tape adaptor and the sound is great. However, I am looking for nice car mount and charger for the time I use my Navigon GPS program.