To connect iPod to stereo, scrap the Radio Shack mini-to-RCA cable, and get a dock. The standard Apple dock is good, and will deliver clean audio and superior video while also charging the iPod, but third-party units come with more features: advanced remotes, sound amplification, and even Wi-Fi connectivity.
The best way to play your iPod in the car: Aftermarket devices allow iPods to play through your tape deck or via an FM radio (e.g. the popular Griffin iTrip), but for
quality sound you need an iPod-ready car or stereo system. Look for an "aux" input or 30-pin dock.