I did the same in the wifes Subaru, the old Clarion worked perfectly, but the new Pioneer does MP3/WMA CD and has Direct iPod control. At under $300 it was money well spent.
If you want to spoil yourself a little, there are more and more DVD units with motorised screens that will fit a single DIN slot and do all the above for under $1,000
...mind you then you are getting close to full SAT NAV systems too... Think about it...
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