For those who have their iPod Touch or iPhones connected to their TVs through a third party video cable, the 3.0 update was a bad one. It appears to have disabled the ability of non-Apple cables to transmit video. Forum members at iPod Touch Fans and MacForums are both reporting the issue.
One forum member reports:
I have an AV Cable for my iPod Touch 1g which up until now worked fine. Then I updated to 3.0, jail-broke it fine and everything else seems ok, but the AV cable brings up the message about it not being a valid accessory.
It isn’t clear if Apple will restore this functionality in a future update.
As a side note, those with Apple chipped cables also notice a significant difference in the way video out works on their iPods. The video no longer plays on the device while it is playing on the TV. The device only displays the album art of the video.
In the case of the iPod touch, some users are downgrading to the 2.2 firmware. However, in the iPhone, this isn’t as easy to do due to the baseband update with the 3.0.