I had the same problem with 2 separate units! Now I am scared to upgrade the firmware. I bought this thing less than 2 weeks ago and I'm already on my 4th! unit! When this thing works it is incredible! But this has to be the most unreliable GPS in the world. If it weren't for 6th Ave Electronics not giving refunds on GPS I probably would've given up by now! I guess there is a reason it was only $169! Here is what happened....
Unit 1 : I downloaded firmware 2.0 from Pioneer's website. Followed the directions and installed. I received an error during installation. The unit still worked afterwards (and it showed 2.0 firmware) but the music player stopped working so I returned it.
Unit 2: I had Pioneer send me the firmware update on a pre-loaded SD card (I didn't want to take a chance downloading and possibly having a file corrupted or missing). I installed the update and it looked like it worked. The unit did its reset (step at the end before you remove battery and restart again... but it never came back to life! The blue light flashed, the Pioneer logo came on the screen then it flashed a white screen and shut off. (during this time none of the other buttons were lit up white like usual). Before I installed the firmware this unit seemed to have a mind of its own and would randomly shut off for no reason. Sometimes I hit the power button and it came right back on, other times it would do a cold boot. I thought there may have been a defect so I returned it.
Unit 3: SAME RESULT as unit 2!!! Everything looked fine then on the final reset it never came back to life!
Now I am on unit 4 and I am scared to upgrade the firmware since it seems like this will just kill another unit! I am using the SD card Pioneer sent me, a monkey could follow the instructions, yet my unit seems destined to stay on firmware 1.0! I do not have this hardwired into my car. I am using the cigarette lighter plug and the sound goes through my stereo using the 3.5mm headphone jack plugged into my stereos aux input. My GPS signal is pretty weak and inconsistent. I considered buying an external antenna. Not sure if the firmware will fix the time it takes to lock onto the signal but I figured it was worth a try. I know the firmware is supposed to fix bluetooth and "general" problems and I would really like my unit up to date. Can someone help? 
UPDATE 8/13/09
I FINALLY have Firmware 2.0! After using the unit for 2 months and struggling to not chuck it out the window! I was getting fed up with having to do a hard reset EVERY day because the unit would randomly stop recognizing most of the music on my 8 gig SD card (it would only "see" the first song in each album). I went to Pioneers website to get info to send the unit back to them to have them update the firmware when I saw there was a 2.000000006 firmware updated late June. Ironically, one of the "fixes" had something to do with installing the firmware without bricking the unit.... go figure! I installed the firmware ALMOST hassle-free. After the update everything was working fine until I decided to turn it off without shutting off the car. When I finally got it back on it was doing the old hard reboot cycle, showing the Pioneer logo for 5 seconds then shutting off! I disconnected power, held in the reset button with a pen until it came on fully...it appears to be fine now. It still takes about 15 mins to get gps lock after a hard reset but it seems to be working better overall. Definitely turns on a lot faster from a cold boot. The TTS update doesnt appear to have worked but I don't care since that voice sounds like a robot anyway! I hope that the music player keeps working and hopefully I wont have to reboot it ever again!