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Drop a "line out converter" into an AMP w/built in EQ and add some good
speakers.

Most factory stereos are built to last, not to perform. As long as the
signal out is clean, you can enhance it.

Many times I have left the head unit in a car, added some good speakers
($100-$250 per pair) that could handle some decent wattage. Dropped in
a good amp with EQ built in ($200 for a Sony Explt for example), and
used a lineout converter ($10) to get it hooked to the head unit. The
result is usually a very good sounding system. It's not near top of the
line, but blows away most factory systems.

Make sure the lineout converter is plugged into a filtered 12V line or
you could get engine whine. You can purchase a filter for about $10.

Now if you want MP3, you can do that via these MP3 to RF adapters
($29-$49). Or you could purchase an amp with aux in and run a line to
where your iPod would normally be located. That line would plug in
like headphones.

Just options. If you do replace the head unit, keep it. They are
almost always worth more at resell than an after market replacement.
Call your local junk yard and ask them how much they want to sell one
for. Never just give it to the installer.