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We have an iPhone 3G and a 4 alternately docked into a small home stereo system. (docked means 30-pin connector)
It all plays fine but sometimes the music skips a few fractions of a second. No difference between the 3G or 4. No difference between air playing from Mac, iPad or iPhone. Strangely it NEVER skips when air playing from anywhere to our tv via apple tv.
I cannot get this to work – it will accept a stream from airfoil on my PC, but not from other IOS devices