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The latest FM transmitter from Griffin Technologies designed for the iPod runs around $49, and contains a docking station.
It "remembers" the last frequency you tuned to, and displays it on an LCD readout at the bottom of the device. This saves the frustrating search for a workable frequency that was characteristic of the first generation car MP3 FM transmitters.
It offers a choice between LX and DX modes too, and DX provides superior noise filtering for great sound quality, even in areas where too many stations crowd the FM bands.
It contains a temperature stable crystal oscillator with phase-locked-loop control to keep the signal steady - which in layman's language, means that it has a stable frequency source with a feedback mechanism to keep it locked to where you are sending the sound!
Griffin has similar products for other MP3 players, as well.