Akinza showed me how to do this. I haven't gone as far as mounting the remote in the console next to the clock like he did but here's what I did do.
I got the belkin auto charger . It charges while you drive. It also has a little 4 watt preamp built into it and this alleviates the line level output concerns I've read about here.
I dremeled a hole inside the console and ran a 3.5mm-->stereo RCA cable through it and plugged the RCAs into the DVD player aux input. You only see the plugs, the rest of the cable is hidden in the armrest. You plug the Belkin into the cig lighter inside the armrest and the 3.5 into the belkin.
THEN, you plug the dock end of the belkin into the iPod and set your stereo to DVD. Works great. Your steering wheel volume control even works but the track selector obviously does not.
A few caveats:
1) MP3, even at 192 sound quality still sucks compared to CD, but I get to carry 2700 songs (so far) in a very small package. Decent trade off.
2) The belkin doesn't fit tightly enough in the cig lighter so you occasionally get audio dropouts when it wiggles during "spirited" driving. If you take anything that might bump into it out, it's much better. I took someone's advice on this forum and got a nice little auto trash bag for like $5 at Target and hung my headphones behind the rear headrest to deal with this.
3) You can leave the iPod in the console and let the remote hang out (or hardwire it). Infiniti gave us a nice little indentation in the console to be able to run a small cable with the console latched. Nice design. You can also lay the iPod on the cup holder cover, in which case, you can reach the buttons with your fingers and don't really need the remote. If you do this, get a silicone iSkin. It gives the iPod enough grip to not slide around.
4) You are taking a dremel to your $50k car. Have a couple drinks to calm your nerves. The dust really sticks to the velvety interior of the armrest so its a good idea to have a can of compressed air and a lint brush handy to clean it up. I tried to get a grommet to make the hole look a little more factory, but haven't installed it yet. Who looks inside the armrest anyway?
Caveats aside, I highly recommend doing this.
P.S. I also installed one of Akinza's air filters and it works great.
I hard wired my 3G iPod in my Fx/tech. I built a plexiglass bracket and used the belkin NaviPod and the belkin charger, the sound quality is great, I cant tell athe diff between a CD(after some vol adjustments). Ill post pics when I get home!