I did some more research in the meantime, and I think i am on to something. The problems I need to solve are:
1. hook the iPOD directly to the stereo
2. be able to switch between CD/RADIO/IPOD and use my stock controls
3. don't mess with car if at all possible

So, here's an idea. You can get pretty inexpensive and small equalizers that have multiple output AND aux input options. So you install that (or have in installed in my case, as I am planning to do) in the glove box. Under 'normal' cirumstances the iPOD will not be plugged in and you will never know the EQ is there, you will just ignore it. But when you want to play the iPOD, you just run a cable from the EQ AUX input to the 3,5 mm jack on your iPOD, set the selector switch on the EQ to AUX and off you go...

It sounds simple, maybe a little too simple. I want to find a good installer that can give me more advice, but these units are available for under 100 dollars.

What do you guys think?