Well, actually the way my iPod will be used is via the USB line, so actually my understanding is that the car stereo will be getting the raw digital signal, not an analog already D/A conversion from the iPod.
Apple provides a cable with their connector on one end and USB at the other. My car came with factory installed genuine Apple branded cable but the signal from that is analog to the car system and hard wired. There is no USB.
If your car has the ability to decode digital from iPod that's great, reading through the list of radio's that can do this, there are precious few.