I've had nothing but bad results from FM transmitters, the sound is poor full of static and in some cases so quiet that I can hardly hear it, even with the car stereo turned up to full.
So decided to take the plunge and see about connecting my iPod directly to my car stereo. After a bit of research I found
connects2.com they have all sorts of interfaces that allow you to connect an MP3 player to a car stereo.
In the end I went for an Aux-In adapter, which connects to the CD changer port on my stereo and provides a Line In connector, which I plug into the headphones socket, I now have near perfect results. It was the best 30 quid I ever spent.
Some of the other adapters would have allowed me to connect to the iPods dock connector and then take control of the iPod from the stalk control behind the steering wheel. But as I mainly listen to Audiobooks I didn't really need it.