So I don't want to use an FM tranceiver or tape deck hook up. And I'm not trying to spend too much.
I also have concerns regarding using a method that also charges the battery - because I don't like to charge until it has run out of power completely (supposedly makes the battery life last longer). I was told, though, that if I don't use a method which simultaneously charges, it will run out of power REALLY fast.

I read on here somewhere about how people were hooking their ipods up in place of the CD Changer? How would I go about doing that?

What do you guys think?

for a 2000TT, I would get something that plugs in ...in place of the CD changer in the trunk. Very easy to install.

The icelink is the best ipod product for your Audi.

http://enfigcarstereo.com/shopsite_sc/store/html/DENSION_I20_AUDI_T.html

Good luck!

Check the link to the mod shown in my signature for LOTS of info on integrating using the IceLink solution (will work in your TT). You'll also see discussion of Nanos and battery life.