PWM is used on most modern cars to control the dash illumination level. Both our A-Class demo car and Hugo's own Beetle have Mk.2 players installed, with PWM dash illumination fed in (our software copes with this) and we don't get any crosstalk.

I'd say it's a supression issue, but you could try disconnecting the headlight sense input from the empeg to see if that's the problem. It would take an experienced installer to comment on common causes and cures for this problem - Dominic?

Rob