It isn't the iPod software that needs to be up to date, but the software/firmware on the iPod2Car.

From discountcarstereo's website:

Description: Discount Car Stereo.com -- Peripheral authorized internet retailer.
The PXDP2 (version 1.2.2) allows iPod users to absolutely maximize the iPod’s potential.

The firmware on the PXDP2 had a bug...version 1.2.2 fixes that from my understanding.

 

I've been getting this error for the last nine months on my 2006 Mustang GT. I've ran the error by the dealer a couple of times over the phone and they've had no idea, just bring it in. Well, knowing computers and intermittent problems like I do I've held off trying to get some depth to the symptoms (i.e. does it do it in the morning, after it warms up, when the tank is full or empty, etc.). It's rather random but I did take a right turn in a 'somewhat spirited manner' the other day and, sure enough, the error popped up briefly. I believe it's in the sending unit(s) and there seems to be some activity on this error in the other forums too. I have an appointment w/ the dealer on Monday and I'll let you know what happens.

Mike

 

I've had this problem happen again, at about 2000 miles. It happened just after the "low fuel level" indicator came on, and disconnecting the battery worked once again. Now I just fill up the gas tank before it shows "50 miles to empty" or roughly a 1/4 tank. It's been about 700 miles since it happened last, and I'm hoping this has solved the problem.

Oh and I still haven't messed with the Ipod2Car anymore either, but I think I'm going to see if I can get it to work properly this weekend, making CD's is a pain...