I use my iPad for the same thing, as I travel by car a lot. I have everything in Apple Lossless, and it works great. I even use Pandora streaming while driving cross-country. Nice. I would offer 2 suggestions to increase the audio playback quality, above what has been given already.
1. Get a connector that bypasses the internal amp of the iPad, and simply sends the signal for the amp in your car...which will be much higher quality. This eliminated any distortion issues I had, especially in the treble. Couple bucks on ebay or Amazon, makes a HUGE improvement.
2. I researched the FM radio broadcast connectors, and discovered that the tape-adapter actually offers a larger frequency range than FM radio does. After some research, I settled on the Sony adapter as it had the highest ratings on Amazon.
I have been VERY pleased with this setup. Great audio quality, along with the convenience of the iPad. Anyways, hope this info helps man.