I have a kenwood KDC-MP438U stereo. I have an i-phone 3G with 4.0 software. When I connect my iphone to the USB to play music the stereo display says reading reading reading and then ipod error. The ipod function on the stereo was working just fine until I upgraded my iphone software to 4.0
Hi If anything the stereo was probably designed and tested using a certain version of the Iphones software, now that version 4 has been released the way the IPhone communicates may have changed.
As a result the stereo is no longer able to talk to the phone and vice versa. your probably best off contacting Kenwood direct to see if they are aware of this problem and if there is anything that can be done about it.
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