Here’s how to make a low cost compact FM Transmitter to listen to your favorite tunes through any FM stereo receiver. The example is a DIY iPod FM transmitter, it’s in French but you can use any translate tool on the web to get most of the details. Link.
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Anyone able to translate?
Use http://bablefish.alavista.com to translate. Brilliant design.
The next step would be to take the cigarette lighter version and add a 5v regulator using something like an 7805 regulator IC and add a USB cable that will charge your ipod from the same circuit. It would only add three electrical components and the headphone jack wire and usb wire could be taped/tied/heat shrunk togther so that they diverged at the end with just enough space to slack to connect into the proper places.
By the way, the author made reference to http://www.maxim-ic.com as his source for the main component. THey give out free samples, so this kit really is cheap.