Here's some pretty poor quality pictures of my iPod & speaker installation.
The idea is to get adequate sound while having the car appear as original as possible, and for the changes to be easily reversed.
With this in mind, the original unaltered ashtray and dash-mounted speaker were removed and kept. The radio fitting amounts to two self tapping stitchers into the underside of the dash.
Overall, this had to be done for less than €100 excluding the cost of the iPod and the head unit (both of which I had already)

Speakers

The dash-mounted 7x3" speaker was removed and replaced with 2 Sony 4" 2 way speakers (cost €40) of adequate frequency response and power. As they sit side by side, there's no stereo separation, but plenty of volume which is what I want. The speakers sit below the original opening, with cotton wool stuffing to stop them rattling around.The sound is fine with plenty of volume, provided you adjust the fader on the head unit to send more balance to the rear mounted 10" woofer, otherwise the bass distorts a little.
The 10" woofer in the rear is factory original. Note that this was originally connected to the dash-mounted fader, which now does nothing. In a while, the radio will be moved to the boot and the detachable faceplate mounted behind the sun visor on the driver's side.

iPod
The iPod sits in a standard iPod dock. The dock sits in a modified ashtray - i used modelling clay to make a secure receptacle for the dock in the spare ashtray and cut the back for the leads. It's pretty crude, but when the ashtray is closed, you cannot tell the difference. Ashtray cost €20.
The dock is charged by a Belkin car charger for the iPod, modified to connect directly to the 12V auxiliary post and ground, rather than by a cigar lighter. (€30)
The line-out of the dock is connected to the head unit by means of a Blaupunkt auxiliary line-in cable.(€7)
The head unit is a fairly crap Blaupunkt Lausanne with 4 40W channels. This was "free" as it was removed from Ruth's Skoda for a better model in 2000.