Originally Posted by Mike-in-Orange
I believe what you're thinking of is the units that essentially splice into the antenna inputs - those will have the same limitations as a radio broadcast (frequency response, dynamic range, etc) so they'll sound better than a wireless transmitter only because there won't be any static as the unit fights with regular broadcasts. All the splice-into-the-antenna units I've seen basically kill the antenna inputs when using the iPod.
That's the theory - that the wired in FM antenna connection won't have interference because the antenna is shut off however, in practice (I tried it with the Drive + Play) there is still interference because the radio is still capable of receiving broadcast signals even though you may have the antenna toggled off.) The bottom line for people with decent hearing who can hear quality audio, FM modulation just won't be satisfactory.
Now if you're half deaf, or if you are cruising at speed with windows open/top down, or could never tell the difference with Dolby turned on or off... then you might be happy with FM modulators (wireless or wired).
All I can tell you is that the day I direct-wired my iPod to the back of my aftermarket, high-end head unit, using real AUX-in's, the sound quality made a huge improvement. And I have old ears...
Think twice before spending the money to emulate a CD changer through the factory NAV radio, just to plug in the iPod. You can do a lot better with a new head unit that simply takes an iPod as another device. Better sound, additional options, better user interface. OK it might not be all silver...But you might even just about come close to spending the same money.