Well, I have not done it yet, scheduled for Wed, but it will be no different than running the Ipod into a home stereo which is perfect. The Aux adapter is an option available on the HK deck on 2003- but you have to buy it and have it installed as an accessory. Basically they will install a little female jack, barely visible at all, somewhere on my center console, then I just male/male wire (from radio Shack) the Ipod into it. It will work better than any other option possible. I used to run the tape in my Z, and that always had that slight whispery sound in the background. Two of the guys at the BMW dealership, including the service manager, had done it and were raving about it. $150 to buy and have installed. Fellow Ipod-ers understand the necessity for these expenditures.
BTW, IMHO, I suggest not getting the Nomad and getting whatever Ipod you can get for the same money, even if it has a smaller capacity. You will not be dissapointed. Has changed my music listening life. Listening now as I type.