This article explains how to use your iPod to make a pirate radio station.
There's lots of great ideas for what to do with such a portable FM transmitter. One of my favorite is:
We usually keep a couple tracks of silence ready to go, ever get stuck at a stop light for like 10 minutes and the dude in the next car is blasting the radio? With the super easy iPod interface you can quickly get to the station he’s on and send over whatever you want, a couple gentle ocean waves or birds usually works out great.