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Volume knob = mute/pause in mine as well (Sept./Oct. '06).
A curious question is: if you set one of your programmable buttons to the "Mute" option, does it just mute and let the CD continue playing, or does it pause similar to the volume knob. Not to take the thread off-course, but maybe some people are referring to muting via this method and not the knob itself.
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335i E90 / Arctic / Gray / Burl Walnut / Steptronic / ZPP / ZSP / Paddles / CA / Nav / PDC / OEM Spoiler
Mods: PIAA Angel Eyes, Rear Fog Switch, Escort X50 Blue hardwire, 30% Charcoal Llumar
Installing soon: Rear Power Outlets (Happy Robot mod!)
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