Ye, you could use a belkin Fm transmitter, but what i found out with them was that the level ov bass from the song goes weaker, but the closer the transmitter is to the radio the better it is.
Can you connect a ipod into the back of the standard headunit?
i kno dan a friend of mine bought one from here which goes into the back of the standard headunit and you can still control via the control by the wheel, il ask him about it for you
I use the belkin tunebase 2 transmitter.
Comes with a number of different attachments to suit the different apple products.
Best thing I've purchased apart from the ipod nano/iphone itself.
Goes in a similar location to this:
That's the one I got, good bit of kit that!