You are looking for a FM modulator. This will plug in to your headphone jack, and transmit a radio signal a few feet. You tune your radio to the appropiate channel - Example: 88.3.
I hear Costco has one for $27, and I've seen them online for $35 to $95. Belkin seems to have a lot of accessories for the ipod. Shop around a bit, you'd like to have one that charges your nano at the same time it "modulates" so you don't wear out the batteries in the car.
Here is one from buy.com:
http://www.buy.com/retail/product.as...54&dcaid=17654
I'm thinking of getting this A/V kit - the wall charger alone is $25 or more:
http://www.buy.com/retail/product.as...54&dcaid=17654