There is no static interference at all, but it still doesn't sound quite as crisp as a CD.
Does this unit you are using for the iPod hook up use digital out, or line out? In other words does the volume control on the iPod do anything when listening through the stereo?
If it's line out, then yes the sounds is not going to be very crisp, digital out is the best.
My iPod connected through the VAIS sounds as good or better then CD. Very crisp, loud, and zero static or unwanted noise. I was actually impressed, I expected less sound quality. It uses digital out, and also charges the iPod while listening.