We don't know how wide-spread this problem is, but I figured if this frustrating complicatioin happened to one user, he probably isn't the only one: SecurityMonkey at the ITtoolbox Blogs posted a tragic story with a happy ending involving Apple's latest iPod software update and factory car interfaces. This dramatic tale of heart-wrenching loss and emotional reuniting with his iPod + car integration kit begins with the software update for is 5G iPod that iTunes 7 requires. Upon connecting his recently updated iPod to the factory Nissan adapter in his car, the display presented the 'No iPod' error message pictured above.
Ultimately, SecurityMonkey was able to recover his factory iPod connectivity with the daring attempt of using the Restore function now built into iTunes 7. Granted it's a time-consuming process since it requires re-syncing all the music back onto an iPod (it also erases any data/files on the iPod, so back those up), but upon reuniting his refreshed iPod with his Nissan - their techno-sexy love was once again in full bloom.
Again, this is the first report we've seen of issues like this, so we have no idea which iPod models this affects, or which decks and interfaces are experiencing these quirks. If any of y'all run into similar problems, give us the details in this post's comments, or submit a tip via our tips form.