I've got an xcarlink in my A4… works really well with my iPhone (although it does get a fair bit of interference from GSM signals and when using tomtom – shouldn't be a problem with iPod)
Really easy to fit (if you're not a numpty), plugs into the CD changer socket on the back of your OEM head unit and one wire pokes out from whereever you can route it to – this plugs into your iPod, charging it and getting the audio.
Because it pretends to be a CD changer it integrates with the head unit controls, and with the buttons on my steering wheel.
When you change CDs, it changes to different playlists stored on your iPod, or if you put it to CD1 it lets you choose music on the iPod itself.
Sound quality is perfect. charging works perfectly. Very neat installation, all hidden behind the head unit, with one wire visible (or hidden in glove box)
Hope this helps,
Dave