we have satellite radios that have FM transmitters built in. the signal can easily be picked up by the FM tuner in the car ... except when you are in a city that happens to have an FM station transmitting on the same frequency (i.e, we tune to 88.1 or 87.9), or when someone else with an FM transmitter (closely tuned) drives by. i know that for some modular satellite radios, they make a device that connects from the base directly to the FM-in on the car radio tuner and temporarily turns off the car's FM antenna to avoid picking up (being overpowered by) local radio stations. when the satellite radio is off, the bypass is inactive and the car's FM antenna works as normal.
your issue is different in that your iPod will probably power the transmitter (possible big drain) and it really cannot be directly wired to your car's radio. also, check to see that you can tune the FM frequency, so oyu can "broadcast" on one that is not already used in your area.
most FM transmitters of this sort will work at distances between 50 and 300ft. or, buy a new car that has an input jack in the dash or console for your iPod. the new corvette has it