Hey everyone. I just bought a used vehicle that had the U310BT installed, and immediately began playing with it. I have an iPhone4 and encountered the same problems described above -- the format errors and the detection but no sound. In the cases where it worked, I noticed I had no apps running, or only the iPod app running. The times when it caused a read error, each time I had pandora or another app running that uses the audio. I updated the firmware to 1.0003 and expected it to fix the problem, but it didn't not. The only way I can consistently get music playing from any application is to make sure nothing is running (or ONLY the iPod is running). Once I plug it in, it queues up my music and begins playing. Once it's playing, i can start any music or sound app and there is no problem getting sound from the stereo.
Now all i have to do is figure out why the BlueTooth mic wont work.
Anyhow, I hope this helps some of you encountering the same problems.