I've got an '06 A6 4.2 arriving in about 2-3 weeks, and would greatly appreciate any info if someone has been able to figure out a way to incorporate an iPod into the stereo system.

 

There are quite a few options open to you, depending on the level of integration you want. Check the link in my sig for some background on older A6es.

The two that I'd recommend considering if you want a high level of integration (control of iPod from head unit, charging, etc.) are the Audi OEM iPod interface (see your Audi dealership for purchase and/or installation) and the Denison Dice product. The latter is a follow-on to the product I installed in my car. I've heard of some issues with this newer product that Denison will hopefully fix with some software upgrades, but their user support is less than stellar, so you may have to do some digging to get it.

Good luck.