I got the Y-cable for my iPod Nano and I concur - it's stiff and a bit unworkable in terms of finding a nice position to rest the iPod. Not long enough to go forward into the centre console front hollow - not long enough to rest in the centre console centre hollow (drink holders) - and too stiff to fold into the recess where it all plugs in! Annoying!
I tried out the USB stick option and I'm planning to buy a few, load them up with different styles of music etc. Cheaper, smaller, neater and out of the way, doesn't matter if I lose one, chop and change at will, still have stalk audio control, if I forget to take it out then I don't have to peak that someone's going to break in and steal it (despite the perimeter alarm!).
Just another opinion