However I did learn something new in the last week or so on one of the Mac forums.
You get a better signal if you use a dock.
When your iPod is connected via a dock or the bottom (multi pin connector) connection, the iPods volume control is disabled and so is the iPods equalizer f I remember right.
I dont remember all the technicals but I'll see if I can find the thread.
Also... when in "my" car I had to use about 50% volume when I was connected via iPods mini jack to avoid distortion on some music. Since I've read that thread I am now connected with one of these
It has a mini jack on it so I can bypass the iPods mini jack and the sound is noticeably better.
Heres the link