Bob,
thanks for all your help. I tried moving the wires a bit today, and that helped. Unfortunately, the iPod cable got a little smooshed and the wire almost got cut (I nicked it a bit) and after a little while I heard cell phone interference. I moved the wire back to original position with the magnet on the bottom of the cable close to the unit, and the sound seems to have improved (can't hear the whine anymore). If it acts up again, I guess I'll just buy a new cable and try my luck. I don't think it is a grounding problem now as moving the magnet seems to affect the noise and this setup seems to have fixed the problem for the time being.