The blue end of the cable goes to the source, and the black to the device being controlled. So, from the D2, blue goes to the back of the radio, black to the iPod adaptor. The blue from the iPod adaptor to black of the changer.
If it still does not recognize the changer, the changer may be defective. Try plugging the changer directly into the back of the radio (no iPod adaptor) and see what works. (I know, more work). If it still does not work, I belive the changer may be bad.
Now for your airbag light. You must have turned the key on with the airbag light disconnected or the passenger seat out. No big deal if you did,most if not all shops have made this mistake with Nissan. Heck, I've done it more times than I can count. (sometimes, you have to) To correct this, you need a buddy with a scan tool that reads airbag codes. (I have a Snap-on Ethos, most of your auto zone $50 scan tools won't clear airbag codes) If you don't have a friend with one, once you have your changer issue resolved, you may need to take the car to your dealer. If you do, be honest with the service department about what happened. They will most likely charge a standard fee (maybe $60 or so) and they should clear the code for you.
Hope this all helps. 