I have been looking into this a bit, and I think there is a nice soulution.
On past corvettes, you could buy a CD changer interface cable for connection to a sony alpine, or kenwood changer, then from that interface you can get an ipod adaptor.
so its kind of a workaround, but it should get past the frequency loss of an FM modulator.
I use a phatnoise music keg
http://www.phatnoise.com/
for my mp3s and plan to make it work in my vette once I get it.