So the section on Rods mentions with its activation that:
Details relating to rod use vary from item to item. See the individual descriptions for specifics.
The Metamagic Rod section says that:
All the rods described here are use-activated (but casting spells in a threatened area still draws an attack of opportunity).
And finally the section on Use-activated reads (snipped the irrelevant parts):
This type of item simply has to be used in order to activate it. A character has to drink a potion, swing a sword, interpose a shield to deflect a blow in combat, look through a lens, sprinkle dust, wear a ring, or don a hat. Use activation is generally straightforward and self-explanatory.
Many use-activated items are objects that a character wears. Continually functioning items are practically always items that one wears. A few must simply be in the character’s possession (on his person). However, some items made for wearing must still be activated. Although this activation sometimes requires a command word, usually it means mentally willing the activation to happen. The description of an item states whether a command word is needed in such a case.
Now, the specific rods mention nothing about "must wave around" or "must have in hand" or anything. Many of the others do. This makes me think that a Metamagic Rod simply has to be on your person in order to work. But is this correct, or must I be holding it?
And if it has to be on my person, does stuffing it in extra-dimensional space on my body count? Ideally I want the rod to be in my Handy Haversack, because my Str 8 Halfling simply doesn't have the carrying capacity for the thing.