On the ipod intergration kit there is another connector for an auxillary connection which will play through the stereo but will not control the accessory. You can use that. You can see the extra wire in the center console in my pic above.
Just trying to help.
Yep, that is true. No FM, direct connect. No control of course when not using an iPod, but you wouldnt with FM either.
Honestly, as much as I hate Apples practices on a few things, I cannot see how anybody can use anything other than iPods for one simple reason: lack of support by any other companies. Face it- Apple took that market by storm, and they arent letting it go until someone comes out with something 100x better, which I dont see happening anytime soon.
Other players may be better for other things, but for the cost of an eBay ipod, having one just for the car is a viable option.