If your main concern is listening to iPod music in your car, the cheapest and easiest way is to buy a new radio. Some new-model radios have auxiliary inputs that you can plug into.
Just buy a one-meter patch cord and connect one end to the radio. The other end plugs into your iPod which you can hang on your neck.
A bare-bone cheap radio with an equalizer is better than an FM transmitter as you wont have to worry about interference. A radio with a mute control would be a plus.
Your iPod has a built-in equalizer and a sound level control which can be preset to produce high quality sound. It will help if you save music files with 160 mbps compression or higher. The principal factors of good sound are the music source (your music file) and the speakers. Since you are confined in a small space, what counts is being able to hear all the instruments in your music file.
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