Here's my Infiniti with an iPod dock I installed a couple years ago. Ignore the song selections It uses the OEM Nissan adapter a year before it was available on the new cars.

Many new cars are much better, usually displaying the playlists and songs in a much more user friendly way on the screen. Even better is the Ford Sync system, which makes everything voice activated as well as shown on the screen.

I have had an iPod dock in our last three cars, and for the iPhone it's great since it plays the songs, usually control it through the steering wheel, charges the phone, allows you to connect with bluetooth through the car speakers, and speak through the car microphone. When a call comes in, it automatically mutes the audio. You can also answer with the phone itself to keep the call private. The address book downloads to the car and I could dial / pick from the contacts list from the center display or the nav screen.

Now if the iPhone supported bluetooth streaming audio, you wouldn't even need the dock except to charge.