Just to shed some light :

Reasons why reception is bad :

• The phone transmits a signal at a desired freq.
• The power of this signal, or amplitude, is not very high.
• It needs to be higher than standard white noise which exists everywhere, in every country.
• In order for the signal to be received by your car radio or any other FM radio for that matter, that FM radio needs to have an antenna connected to the receiver part of that radio.
• If you are in your car, the antenna is outside at the back, and it's not a very good antenna anyway, the reception of the already low power signal from the N900 will be bad.
• Now add to that, some radio station is also broadcasting on that frequency, but with a much much higher power, it practically drowns you signal - and you will hear nothing.
• If your car radio has some sort of attenuation if the reception is not good enough, you will hear nothing.

Ways to improve the reception of your N900 signal :

• Install and use FM Boost on the N900 (ideally together with the FM TX widget)! ( Thx to twaelti for reminding me )
• 1st, put the phone right next to the antenna, even if its outside and far from the radio, and test to see if it's better.
• If it is better, it doesn't promise that some sort of signal won't drown your signal after you make a right turn to the next block.
• If you really want to use the FM transmitter on daily basis, you can purchase a NOTCH filter, and filter out a specific frequency - This filter should be connected directly to the antenna, between the antenna and the radio itself. Now your antenna won't receive signals on that frequency. Now you take you N900, put it as close as you can to your radio, and if it is not isolated enough, you will have good reception.

NOTCH Filter : A notch filter removes (by attenuating them drastically) all the signals in a specific span of frequencies around a center frequency, practically filtering out a unwanted signals letting you use that filtered frequency without interference.

Edit : Improve post looks
Edit2 : Added some info on notch filter + FMTX Boost tip.