IPOD in S3 but with DIS

No.

I used a Dension ICE>Link on a Chorus HU for a while. The DIS showed 'CD1 Track x' as the info, and not the ID tags that the iPod itself shows. This is the same on the HU display - you get to see the CD number and track number only.

If you want to display the ID tags, change the HU - but don't expect to get the DIS showing anything at all if you do (It will show the other 2/3rds of the display, of course as well as petrol warnings and so on).

As a result I ended up using the iPod interface in the Dension kit since it was a) more informative and b) more responsive. I finally ended up replacing the Chorus for an Alpine HU with a KCA 420i adapter - the sound is far better and the HU shows all the info I need... meaning I can put the iPod out of sight.

10 min job

I actually didn't use spacers so much as a fascia adapter. It has the slightly wider side pieces which fit the shape of the cut out and a thin top and bottom line to fill in there too. Its an all in one adapter, not the little side pieces you often see advertised, and is a perfect fit. Here's a pic from a superb German outfit - excellent service and really good to deal with:

Radio blending plate

The Dension will replace your existing changer so you won't have a 6 disc changer, so much as a 600 disc kit (by using the iPod). If you change the HU to an Alpine then you'll need to think about the dension again, since it will need a different link. Also, the later Alpines which use the Ai-Net system work best with the (cheaper than dension) KCA 420i iPod adapter - simply plug this in to the rear of the HU and the iPod into the other cable and you're good to go.

Sounds to me as if you have a couple of options:

1) keep audi HU and use the dension kit, replacing your CD changer with the iPod
2) change to Alpine HU and consider getting KCA 420i to use with the iPod (cheaper, easier to use)
3) change to Alpine HU and get the appropriate dension kit

My ipod plus Alpine headunit.