You could check out the Harmon Kardon Drive+Play. Big pockets and SVP were doing them for £23 recently. I have one in my new A3 and it works superbly with my iphone. It shows track / artist / album / playlists on its own lcd screen.
Mine connects via the 3.5mm port in the centre console. I don't know if yours has that but it can also connect to the headunit, via FM transmitter (built in but like all such devices it isn't very good sound quality), a an optional hardwired FM modulator (plugs into aerial socket with an aerial passthrough - better) or via phono pre ins into the back of the headunit (best if you have them, or any kind of pre-in so you can make up an adapter).