What version of firmware do you have on your 3rd Gen iPod Touch?
As taken from an iLounge article:
The back of the late 2008 iPod touch has four lines of engraved text, which sit between an “8GB,” “16GB,” or “32GB” badge and a collection of electronic certification logos. The engraved text starts with a serial number and ends with the words “All rights reserved.” By comparison, the back of the late 2009 32GB and 64GB iPod touch models has a noticeably smaller “32GB” or “64GB” badge, and only two lines of engraved text before those logos. The text starts with the phrase “Designed by Apple in California” and ends with the serial number. Otherwise, the units are indistinguishable from one another when their screens are turned off.


Keep in mind that the 3rd Gen iPod Touch was released toward the end of 2009 and is the first of the Touch line to offer 64gb support. They have slightly different hardware than the 1st and 2nd generations.
The 1st and 2nd Gen iPod Touches work fine under all firmware versions. The 3rd Gen apparently doesn't work under the latest firmware version (3.1.3), but Pioneer says it should work under 3.1.2.
I spent a lot of time trying to find a solution and have talked to 3 different Pioneer customer service reps (2 were helpful, one was dismissive and wasn't helpful at all), as well as 2 Apple customer service reps.
2 of the Pioneer reps said that in their notes, it shows that the iPod Touch 3rd Generation works with the 3.1.2 and below firmware. Recently, Apple has released the 3.1.3 firmware and I've been scrambling to find a way to downgrade firmware. I think I've found a way that works, but it's a little bit of work and I'm hesitant to try it just yet. I'll let you know if that fixes my compatability issue, though. If not, I'm stuck with the Aux cable until Pioneer updates their firmware on the x910 device and includes/updates their iPod support for this.
From what I got out of the Pioneer reps, they do pass the feedback on to the development team and since the unit was released only in 2009, they still support and upate it. So, I don't see any reason they won't eventually update the firmware to properly support the new iPod Touch 3rd Gen. I believe the last x910 firmware update was in Feb, so it wasn't too long ago.
As for the iPod Touch 3rd Gen, according to the Apple reps, they did some semi-significant hardware changes for the 3rd Gen iPod Touch, so that's probably the stopping point for the compatability.
Either way, I'm hoping that sometime next week I'll be able to downgrade the iPod firmware to 3.1.2 and give it a shot. Hope I don't break it :\ If that doesn't work, I'll try 3.1.1. Again, I'll keep you posted.