Ipod sound quality compared to XM?

My used A4 came with XM, so I activated it for the 3 month trial. Although its nice to get fresh music, I have been very unimpressed with the sound quality. The best way to describe it would be its dull, lifeless and no contrast. I'm led to believe that's because of the compression of the xm. Comapred to FM, its great to have good reception, but FM sounds much livelier.

I'm thinking of doing the Audi ipod adapter, and cancelling the XM - saves the wiring issues and subscription. So how does the Ipod sound compared to XM? Sure it won't be as good as CD, but is there a noticable difference, like there is for XM?