I have a DICE unit w/iPod and it's the ONLY way you're going to:
1. See the song title, artist and album scroll across your NAV screen.
2. Use your steering wheel controls to change songs.
3. Avoid an after market gizmo sliding around/cluttering your dash.
It's not perfect and there are other solutions, but none of them will do the above as far as I know. I LOVE the iPod in my Z4, who needs radio with hundreds even thousands of songs tucked away inside the storage shelf, I am my own radio station... who needs CD's when you can have up to 40,000 songs on a $350 device with no moving parts.
And new iPods came out today! Call the Dice people, see if they are supoorting the new Apple hardware.
My Nanos have served me well, but they are already 1.5 years old.