Poor sound quality when using iPhone 4 in car via aux lead

Anybody who knows about aux inputs and headphone jacks have any idea on this?

I use my iPhone to listen to podcasts and music in the car while I'm travelling. Done this with my iPhone 3G for a couple of years with no problems at all. Use one of these cables to connect the headphone jack of the iPhone to an aux input on my car stereo (a standard BMW 'business' head unit).

http://www.monstercable.com/productdisplay.asp?pin=5150

Sound quality has always been excellent.

Got my iPhone 4 last week, and today plugged it into my car stereo. Immediately noticed that the sound quality is much, much poorer than my old 3G.

There is a continual hiss in the background, with random crackles and pops. So poor in fact that I cannot listen to speech radio (which most of my podcasts are.)

Same car stereo, same aux cable - it's just the iPhone that is different.

Has anybody else got this problem, or should I get the phone checked out?

I've tried aircraft mode, which makes no difference. If you turn the iPhone volume right up, it is slightly better (better signal-to-noise I guess), but still not good.

Also if I pause a song, the hiss continues for a short while, followed by a few pops then silence. Headphone circuitry being powered off?

Found an old spare aux cable - no better (or worse).

Finally, got my 3G out - and as I remember, the sound quality is perfect.

Another issue with the iPhone 4? Hope not.