the big advantage is you don't have to mess with your ipod anymore. I leave it in the glove box and use the steering wheel controls. And I can't stress enough how much nicer that is. If you don't have yours connected that way you will never know what your missing. It also keeps it charged on long drives.
How comfortable are you with doing things yourself?
There's several possibilities of what could be wrong. I don't recall if you tried switching out the cable you're using between the iPhone and the aux jack. Try that first, maybe the cable has gone bad.
If that doesn't work, you might be lucky and have a loose connection in the console. Search for a thread on how to remove the console or how to put a console in the EX model. Pull your console and see if the connection is loose between the aux jack and where ever it plugs in.
That's about all I can suggest before you might need to pull out a soldering iron...
The USASpec thingy would probably work too, not sure how it works with an iPhone though. To install that, you'd need to pull the radio and plug it in the back where the multi-disk cd changer would plug in (I think, that's how it would have worked with my wife's Civic, I never bothered to find out with the E b/c I've got the aux jack built in). Then the controls for that are used for the multi disk cd player are mapped to the iPod.
yea i can pull the console just lazy and hope it was something i could blame on the factory, ill have to try that, i did switch cords already, hopeing for the simple solution, but ill look into the USa spec gadget