Welcome to the forum HMCRM...I just joined a few months ago and it seems like there is a good group of people here. I think you'll enjoy it.
Your explanation of the iPod problem is better than I've heard from Toyota. It certainly seems plausible to me. I agree that it's dissapointing that the designers of the system didn't think of it!
The installation is quite neat. They install the iPod adapter in the upper glove box, so it's safe from prying eyes and won't go flying in an accident. The only minor complaint is that you need to reach over with both hands to plug in the cord. Not a huge deal, but if you were small or had a bad back it could be a problem.
In terms of how it works, it's really a bit of a kludge. It fools the stereo into thinking the iPod is a 6 disk CD changer. It equates each playlist to a CD. Given it's designed for a 6 CD changer, I'm pretty sure you can only see the first 6 playlists on your iPod.
To control your iPod, you can press disk up and disk down to switch playlists, scan-up and scan-down to switch between songs on a playlist, and fast forward / rewind to speed through songs or back up within a song.
The Text button allows you to see more of the song title (still not enough), the playlist name, and time information.
Random works as you would expect and so does repeat.
Sound quality is fine. It's a direct connection into your stereo so it's probably as good as you're going to get with a Toyota radio and an iPod. I'm no audiophile, but I suspect that the Corolla sound system isn't top of the line.
And you're playing compressed audio so those with golden ears (which I don't have) might notice a difference between the iPod and a commercial CD. I used an iPod FM transmitter in my last car. This is MUCH better than that.
As an update to my first post, I purchased an iPod touch this week and the problem of it not playing on when I re-start the car seems to be a problem with the iPod touch as well.
