hmmm... Double check to make sure your 1/8" jack is ok on both the cable and the Ipod. Should be, though. I've seen people use a mono cable instead of a stereo one though, and they had the same problem as you!
Lastly, the iPod doesn't know its playing to a set of earphones or an aux input. So, set the volume up to near 3/4's or so, and make sure your head unit's Auto Volume control is off, then try again.
