I am kind of curious about that myself.
I am debating whether I should hook up a Jazzy kit, or get an XtremeMac inCharge FM modulator.
I'd get a Parrot, or whatever, phone/music stereo-bluetooth kit, if the iPhone would broadcast A2DP stereo bluetooth in iPod mode, and switch over to phone calls on the fly. Then all I would need is the power cord I already have. But, sadly, as of now, Apple shuts off the stereo bluetooth feature, and only does monaural for phone headsets, not stereo headphones for the iPod function. (the single, most puzzling, and biggest failure of an otherwise AMAZING device.)
The advantage with the FM modulator, is that I could use it in my wife's car, or any car I happen to be riding in, and have it along.
The Jazzy Kit probably has better sound by far, and is somewhat customizable on the input side, depending on how built-in you want to make it. One could leave a 1/8" headphone jack, and use a belkin car charger adapter with a gain-adjustable Aux OUT, a short 1/8 male to male jumper to connect them. (assuming that the signal comes through. I've got an old one, I should test that with my new iPhone...)
Or, one could get a dock connector cable, with bare wire ends, and wire/solder/via-molex-plug it in to the Aux Power point in the console, and into plugs that go into the jazzy kit/GLI input, and is all under the console, with just a fixed, powered, aux-out dock-connector cable that goes directly into the upholstery, and into the stereo. (center box, or glove box, or wherever you choose for the cable to come from)
That would have the effect of not having an authentication problem with the accessory-identification system in the newer iPods and iPhone. Sometimes that can allow things to work by not triggering the device to shut-down the aux-out lines, or the iPhone might be set to only OPEN the aux-out audio lines for authenticated devices... I would hope the former, not the latter, were true.
Somebody on an apple forum fabricated a microphone-to-line-in custom device for the iPod Touch, and it actually worked, because it didn't try to authenticate at all, where "official accessory" dictation microphone inputs for older iPods did NOT work, when the input lines were closed by the iPod. Granted, the fabricator was trying to put a microphone on the iPod Touch to turn it into a VOIP phone, with a microphone, and the headphones as a speaker-side, which is probably EXACTLY why Apple chose to have the iPod Touch shut identified microphone accessories down.
The same might work for an un-official aux-out cable for the iPhone, allowing aux-out, although some official accessories do use aux-out from the iPhone, too.