Why would you use an iPod AND a changer? The iPod eliminates the need for the changer.
I've had this setup in my car for the last six months, using an iPod mini. The only problem I've had is the head unit interface with the iPod doesn't always advance or backup tracks when you tell it to thru the head unit. I installed an iPod wired remote and use it to switch tracks. If someone comes out with a wireless RF remote, I'm buying it.
The sound quality is exactly what you'd expect. It sounds like you plugged your iPod into your home stereo. No FM modulating hissing, nothing. I'd use this setup to compete in a sound quality competition. The sound reproduction matches the head unit's CD player. You'd never tell the difference. And you'd have days worth of music on a roadtrip (did 6000 miles last month. The iPod was a Godsend).