Credit where its due. I bought a new stereo as above, from Halfords. It cost just under £200, plus £20 for the ipod kit, and just £10 for install. It took the poor guy 2 hours - that's what I call a good deal.
As well as having a pretty fascia, 4 light colour schemes, the ipod (in the glovebox) fully integrates showing track info on the radio screen. And the phone directory is "sync'ed" after first turning off and back, and calls can be made and received fully legally handsfree with music auto adjusted when a call comes in.
Previously, would have had to buy a lot more kit to get all this. Highly recommended.