ahhh... so after the car is started the DSP is muted, and if you hit the pause button, it unmutes, but it's paused, so no sound, and hit it again and it's unpaused but muted? Interesting.

Yes, exactly. If you listened carefully, you could hear a brief burst of music between the two states, for the brief instant it took between the unmuting and the pausing.

This has happened since day one with me and i thought a bunch of people had reported it. no?

A few people did report it, yes, but the guys in Cambridge couldn't reproduce that specific instance of it (happening on car starting). It seemed to have something to do with the way the voltage behaved on the ignition wire during an engine start. I could reproduce it for a while, then I did some rewiring work and suddenly couldn't reproduce it any more.

Like the man said, the pause/mute toggle won't get de-synched any more, but you might (not sure) have to press the pause key once to clear the situation if it does happen. At least that's better than having to power cycle...

Anyway, if you can reproduce the on-ignition-start version of the problem reliably now, I'd be curious to see if you can reproduce it after the next 2.0 version hits the street.