Here is the biggest trouble with the headphone output on any ipod. it is a filtered output, that has EQ settings that are meant to go with tiny little speakers (the headphones). Nicer cables can't help an inherent frequency problem. Your only option to get decent sound out of the ipod, and into your aux input, is to use a product similar to what Evolved posted earlier.
I have a similar product, and once I turned the volume on the amp on the lineout down just a bit, to prevent distortion. I have the griffin version of this product, it has a little wheel to turn down it's output. Pretty good until I can rectify the bummer of no usb/ipod interface.
Here is a
linky for Belkin Auto Kit