That is indeed a classic you have there.
Since Apple has long ago deprecated the classic iPods.... I would not expect the HU's in newer cars to play well with them. I would expect quirks exactly like you are describing. I also heard that Apple is in the process of deprecating all other iPods except for the Touch series.
Personally, I only have an iPod Touch and I tried it out when I got my new CRV and did not have any issues with it.