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My Iphone 2G works fine with my Apple iPod HIFI. Just take out the removable tray insert thingey and it plugs in fine via the dock. A message appears on the screen stating that the accessory is not made to work with the iPhone but it does non the less, even when not in Airplane mode. The remote controls the iPhone too.
 
I think at this point I'm going to go with the bose sounddock portable. Downside is the battery is complete garbage.
 
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