I recently began using the auxiliary audio port on my car. I’ve had some interesting discoveries.
First, interference. The whole thing worked perfectly until I plugged in a car charger to the iPod. Over the speakers I was getting a ton of electronic noise from the iPod. Using the Click Wheel, having the backlight turn on and off all changed the noise. At my house we had similar issues with interference on our home theatre due to a ground loop. Ground loop explanation thanks to wikipedia:
... Low current wiring is particularly susceptible to ground loops. If two pieces of audio equipment are plugged into different power outlets, there will often be a difference in their respective ground potentials. If a signal is passed from one to the other via an audio connection with the ground wire intact, this potential difference causes a spurious current to flow through the cables, eg: creating an audible buzz at the AC mains base frequency (50 or 60 Hz) and the harmonics thereof (120 Hz, 240 Hz, and so on), called mains hum. ...
The iPod is connecting to the charger which connects to a “cigarette lighter” type power port. That power socket and and the stereo have different ground potentials and thus cause the interference. To fix this I purchased a ground loop isolator. I found one at Circuit City for relatively little. Using 1/8“ stereo connector to RCA adapters to connect the iPod to the Ground Loop Isolator and then into the AUX port. Clear sound.