overclocked,
since you're in the states, monitor a website called woot.com for fm transmitters - they come up often. Last set i bought was $14.99 for two (7.50 ea!). They're 12v powered, but opening one up, there's a tiny step-down switcher in there trickling out 3v, a TI 430 flash mcu and a digitally controlled stereo fm transmitter IC. I'd planned to hack mine to run from a cr123a, since I don't want to dedicate a 12v socket for it, but I haven't gotten around to it yet.
the sound quality is excellent provided your can find a quiet fm channel on your dial - it's easy up here in farm country, but might be harder in a metro area.
hacking your head unit and exposing a line-level input will yield the best quality. if you have a GM with onstar, you can hack into the onstar audio circuit which feeds into the head unit - a lot easier than hacking the head unit itself.