FYI, the iPod Classics and Nanos will not work with this technique.
This method is only good for iPods with Video up to 5.5 Generation. This article was originally posted to address those models, but many new owners are looking for a solution here.
In other words, if you have video capabilities and Coverflow on your iPod (or nano) this trick won't work.
Apple changed the game so you can no longer access video through the headphone jack, you have to output it through the dock connector, and you have to pay Apple $50 for a cable that will work.
They put a verification chip inside the base of the cable where it attaches to the dock connector. Right now only Apple has the chip, but presumably they'll license it to other manufacturer's at some point.
I love Apple, but I think this was very, very lame on their part.