Here's what I used for my install:
- Arkon CM131 ratcheting PDA mount
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- Monster Cable iCharger (low profile, with dock connector and line out)
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- 6' RCA male to stereo jack (3.5mm) cable
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- Scosche Eso34 ground loop isolator
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The only tools I needed were scissors, some 3M mounting tape, a nail file, an old plastic slate (one of my old dive slates), and a couple of black plastic tiewraps.
My first option for mounting was someplace a little lower, like where dangerz0ne drilled the hole for his switch, but with the arm out and the iPod in, it got in the way sometimes when steering or when reaching for the ignition. Might've also caused problems if I have to remove the vent panels in the future, as the ratcheting arm's base is a bit big.
In the end, I ended up getting rid of the ratcheting arm and then cutting a plastic insert (my dive slate) to replace the back of the mounting clip, so that I had a surface to attach the mounting tape to. And I put it high on the dash, right next to the clock and the stereo, like so:
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My head unit has an auxiliary input, so after opening up the middle panel just like dangerz0ne did, all I really had to do was plug in ground loop isolator (it uses RCA jacks, so it was really just as simple as plugging in) and then plug in the cable. The isolator, I taped to the top of the head unit, padding it with some foam so it doesn't rattle about. The cable, I dropped behind the vent to come out under the dash.
I didn't wire a power source, opting instead to use the power point in the back, since no one really sits back there anyway.

That also keeps my front power point free to charge my phone or whatever. I leave the charger permanently plugged in, so whenever the iPod is connected, the battery gets charged.
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And then I just ran the charger's cable around the side and under the lip of the center panel (you can bend it back to tuck the wires under)...
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...until someplace just beneath the dash, where I start to thread the audio cable through the middle of the coils, so there isn't a mess of cables.
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I used the tiewraps to clip the two wires together once the audio cable exits the last of the coils, and also right after the stereo jack head, when it's connected to the line out of the iCharger. The PDA mount assembly slips onto the peg of the mount clip that was already taped on the dash, and I used an old metal clip (just super-glued to the back of the PDA mount) to serve as a hook for the cable, which I run behind the mount and under.
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Besides filing down the plastic dive slate to fit the back of the mount clip, I also used the nail file to file down the plastic at the bottom of the PDA mount just a bit, because the opening was too narrow to accommodate the dock connector. Now it fits perfectly.

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Sorry if the pics aren't more step-by-step, but I didn't think to take pictures while I was doing it. If anyone wants to try this, you can e-mail me; I can send a few more detailed pictures like of the back of the PDA mount, or the ratcheting arm (so you know which part to remove).
Sound quality is so much better with the direct connection; I also used an iTrip before, and it was decent outside the city, but got a lot of interference in the commercial areas. I don't use the equalizer settings on the head unit because they're not that great, opting instead to tweak the bass and treble, and then using EQ settings on the iPod.