there are quite a few systems that have Ipod connector hookups, one was called the iceLink, which practically does what the newer E46 BMWs do with Ipods, except that unit plugs into the CD Changer outlet of your stereo...pretty nice but it costs around $500.00 you can get a good Mp3 deck for around $200.00, and you don't even need a Ipod. I like how I can just burn the latest mp3s onto a CD and then chuck the cd out when I get some new music.
if you get an Ipod + Icelink you have to transport your ipod back to your computer in order to get new songs and whatever. Also you lose the ability to play Cds!! unless you have the business CD stereo w/ CD Changer compatiability...which you do. But the cost effective way is to get a new headunit.
There is a Ipod hookup kit for the older E46, OEM from the dealer, costs quite a bit though.
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Real cars have 3 pedals.