So I upgraded my Iphone 3GS to OS 4.0 yesterday and can no longer control my Iphone from my head unit, always says reading file, then connection error or device error. My Iphone also says this accessory is not optimized to work with this Iphone. The work around I have found is that if you do manage to get it to start playing music, immediately go into your head units settings, and change your ipod direct control to On. Granted you lose all capabilities of controlling your music from the car controls, but hey, you can still listen to your music! If anyone has found a solution besides reverting back to the previous OS, please share the wealth.