If you want to listen to your iPhone's music on your home stereo, you have a variety of options to make it happen. Your stereo may already have a dock connector that fits an iPhone or iPod. This is the best possible case since it is designed to already work directly with your phone. Unfortunately it won't be that easy in most cases. The least expensive approach is to buy a cable at your local electronics store.
To connect to your iPhone, it needs to have a stereo mini-RCA connector which is the same thing as used by headphones. On the other end, it needs to be able to connect to your stereo: usually this means a pair of RCA connectors that are usually one red and one white. You can probably find one of these cables for only $ 5 or $ 10. The downside is that playing music this way will quickly run down your battery.
An easy solution is to buy a dock for your iPod. You can connect a power adapter to the dock itself. The dock will also have a place to connect a mini RCA cord. This way, you can easily drop the iPhone into the dock to charge it and listen to music without fussing with various cables. Wireless solutions are available but may not work as well as the option of connecting via a physical cable. By connecting your iPhone to your stereo, you retain all the benefits of keeping your music portable, along with using the high quality home stereo system that you have installed instead of just listening to music with headphones.