update: with the release of the iPhone 5 this method works great since there are no accessories on the market to connect to car stereos.
Adding Bluetooth to a stock car stereo can be easier than one might think. It can also get a bit expensive depending on which route you want to go. There are plenty of after market head units that have Bluetooth built in but these head units can sometimes range from $150 and go up from there. If your like me and still have your stock stereo you can still add Bluetooth to have stereo streaming support for around $50. This can very for different make and model cars so do some research on your type of vehicle if you want to go this route. Some cars (like mine) have an Auxiliary input to plug in an MP3 player or other audio devices. Fortunately my car has stereo RCA inputs in a very accessible place. My first method was using an iPhone compatible cable that used the dock connector of my iPhone to play audio but the method I will be covering will work for any device capable of A2DP stereo streaming. Some makes and models might have the RCA connection directly on the back of the stock head unit. If not, and you know what you’re doing the audio line can be spliced into the speaker wiring on the back of the head unit. But what I will be talking about is adding a stereo Bluetooth streaming feature to a vehicle that already has an AUX input. First use a Dual mini bullet cigarette lighter charger you can find them on Ebay for about $4. This will allow you to charge the device when needed and not interrupt the Bluetooth. Next choose a Bluetooth receiver that supports Full A2DP streaming. The one I will be talking about is a Cerulean RX by iSkin this can be found on Amazon for $39.99. This device was chosen for its small size, good rating and features. It can be plugged into an iPhone dock connector of any portable stereo or it can be used with the 3.5 headphone jack and it is USB powered, this is the key feature here. Once you have these the rest is pretty simple. Connect the USB cable to the Cerulean RX and connect it to the USB car charger. Then plug in the 3.5 headphone cable (which is supplied in the box) and if needed use the splitter for an RCA connection (also supplied in the box) and once it has power you can sync your mobile device and start streaming (don’t forget to set you car stereo to AUX). When you mobile device needs to be charged just use a standard USB charging cable (which you should already have) on the second USB port of the Dual Mini bullet.
There are a couple of draw backs that I have found with this particular set up. One is that you will need to connect to the Cerulean every time the power is turned off then on again (At least for an iPhone that is). Secondly there is a faint audio crackle on the higher frequencies but its doable (if you’re not a complete audiophile). Over all its a great set up to not have to deal with wires when driving and the device can still be charged.