Okay, I was too impatient to wait for the Audi ipod OEM solution. I have just finished installing the necessary components, and it just works. I want to thank N3WBI3 at the audiworld.com fourms for investigating this and confirming it.
You will need a Audi/VW radio removal tool. If you have the Symphony II, I think you will need 2 pair. (I have the Concert II).
The car is NOT pre-wired for CD, so I also had to purchase the AA3-HAR adapter that is shown next to the radio removal tool. The 10mm wrench is for disconnecting the negative battery terminal. Oh yeah, this article is FOR INFORMATIONAL PURPOSES ONLY.... I'm not responsible for any car-fires caused by faulty installation.
Here you can see the VW/PC-POD adapter. There is lots of space behind the climate control area.
You can see how the top rack of cables plugs into the adapter cable.
The iPod adapter takes the right-most slot of the top bank on the radio. Make sure you ground this cable to metal.
The slightly harder part is feeding the iPod dock cable from the back of the center console to the glove box. The glove box liner comes right out with a firm pull. I drilled a hole in the back to allow the cable to pass through.
Here you can see what it looks like when finished. You can leave the cable in the glove box if you want, but I was getting tired opening/closing it, so I have opted to leave it out for now. A neat installation would be to get a dock and retrofit is somehow to go where the ashtray is currently located. If anybody has any ideas...
I purchased the iPod interface for approximately $140 shipped via ebay and the cable was another $25. I was quoted about $195 (includes tax) for the Audi cable, so I saved a little, and I got it a whole week earlier. You can see that the PIE interface disables the iPod when connected.
Hope this helps.
I have changed the placement from the glove box to under the console as I was getting tired of opening/closing the box to get the iPod. Some people have mentioned that they like to keep in the glove box for security reasons. I am thinking of making some "home-brew" panel to cover this area so at least you don't see it from outside the car while parked.