... I'm experimenting with leaving some old thumb drives or adapted CF cards in the car with specific excerpts from my music. I also now have 4 mixed AAC and MP3 CDs with music and podcasts arranged in folders -- for children, me, etc. Note a 2 GB thumb drive is usually under $30. Techbargain and similar sites often point to sales on these things. I'm looking for a short usb extension cords with a right angle turn ...The experiment has been a great success with a $30 2GB SD card and reader ($15 if the rebate really pays off). I haven't been able to locate a 6" USB cable with a right angle connector, but the standard 6" cable is working well.
The stereo plays AAC very well, and iTunes is a great staging platform for both burning AAC/MP3 CDs and transferring multiple playlists to the 2GB reader/card combo. The one restriction, of course, is that DRM doesn't play in this world -- I'm now buying CDs to replace the 10 or so fairPlay DRMd tunes I want to keep.
The next step is to start taking the SD card from the car into my office. I stick it in the laptop, configure iTunes to reference the tunes in place rather than import them, and drag and drop the folders into iTunes. In less than a minute the entire Library is created . I connect my headphones and play from the laptop.
So, where does this leave our three iPods? Hmm. I bought a new car stereo primarily for use with my 4G iPod, but now I find I don't bother with it in the car. The AAC/MP3 CDs and memory stick are far more rugged and I don't care if they're lost, stolen, or broken.
iTunes remains invaluable , but our Shuffle is now less useful. I wouldn't buy a Shuffle again, I'd spend the money on an SD card that I can use for music or in my camera. The Nano is still great for exercise and general portable play. The full-sized iPod is not suited to exercise but it plays videos  and I'm still very fond of it for travel.
The SONY car radio is having a very interesting effect. I suspect I'm not the only one that will notice this. People don't replace their car stereos all that often, so this will take a while to percolate, but the writing is on the wall. DRM is clearly doomed for music, but I think video DRM has a few years of life left . Ultra-cheap solid state storage devices are going to have lots of interesting effects . Apple might as well give up on the Shuffle (stupid cradle) now, or make as a mobile storage device with iTune . The Nano has some legs I think, but the Apple phone better work. I know I hope it will!
 The sound quality is not as good as my iPods -- they have a better D/A converter than the Dell laptop I have at work. When I redo the SD drive I have to wipe the Library to avoid 'missing tunes', but that takes only a moment. I could import the tunes, but they use up a lot of space and it's tricky to avoid wasting space on the corporate backup server.
 There's nothing to stop Microsoft from licensing AAC and providing a competitive alternative on the Dell laptop; Apple doesn't own AAC and there's no fee for playback use with AAC. If the Zune continues to flounder I think they'll cave.
 More on why, surprisingly, we've actually found a use for video on the iPod, and why we may end up willingly buying DRMd video/tv via the Apple store even as we've abandoned Apple store music.
 Apple better start thinking about a video-FairPlay solution for vans though!
 iTunes could begin to support named external media to make the workflow smoother for removable music storage devices.