Are you asking about FM transmitters for the iPhone specifically, or FM transmitters in general?
If the latter, I have a Griffin iTrip that you plug into a 12v socket and the dock connector on my 4G iPod and it's absolutely great. The sound quality is a big step up from my former iTrip that connected to the headphone jack. Plus, it acts as a charger for my iPod, which is great because I never have to take it out of the car and charge it on a nightly basis like I had to before.
Now if only Apple would release an update that would allow the iPhone to work with all FM transmitters instead of just the iPhone specific ones, I would be a happy man.