The only thing that makes sense to me is that the radio keeps some song location/information data stored for each device connected through USB. When a device changes some of this information, the radio has a hard time dealing with it. I am happy (well, sorta) to see that this problem isn't just me and my iPod. I will keep updating on what information customer service gives me, and whether of not the new diagnostic tool works.
That is correct. From the Intellilink manual pg.43:
While Gracenote is indexing,
infotainment features are available
including selecting music from the
menu. Voice recognition music will
not be available until the radio has
completed indexing the device.
Devices with more music may take
longer to index. The device will
index when plugged into the radio
for the first time. When "New Media
Device Ready" plays, the device is
ready for voice recognition music
search. On the next connection or
ignition cycle, "Indexing" will show
briefly on the screen. The radio is
searching for changes to the device
and preparing the music list. If
there are no changes, the voice
recognition music search will be
available. The radio will index
and store two devices with up to
10,000 songs on each device.