I'm in the midst of making a decision about an iPod purchase right now. I do a lot of out of state business trips by car, and using the CD player in the car isn't always a safe maneuver. I've been thinking of using an iPod and connecting it to the car stereo system using one of those adapters that looks like an audio cassette with a little cable that has a mini-plug that goes to the iPod.
I like iPods, but if car travel is your focus, you might be able to get a car stereo that plays MP3 files from CD-Rs. That would put the controls right in front of you while you drive. Of course, that solution is also bolted into your dash, so you'll have to decide.
My mom just had surgery on her ear....so no headphones. I bought her for 29 bucks a radio tranmitter. It is small and fits right to the top of the ipod...it then plays though any radio with no wires. Kitchen to car to living room, etc. It has worked well for the couple weeks she has had it.
Some of those cars don't have cassette players. I have an FM transmitter for my iPod to use for car trips. I also have a couple of audio books on my iPod which are great for travelling if I tire of music.
We just got something cool - it's an Alpine car deck that controls your iPod, which you connect to a cable inside your glove box. Pop it in there, shut the door, forget about it, and control your iPod from your stereo.
We didn't replace the speakers, but what an upgrade in the sound - amazing. We bought two of them.