OK – I upgraded!
I had a moment of sheer panic when my ICE>Link stopped working… I think it was because I plugged and unplugged it in too swiftly, causing the device to hang. I upgraded the iPod firmware (kindly supplied by Apple and it started working again after the iPod restarted, but in for a penny in for a pound – I went ahead with the v2.05 firmware for the ‘link’ too… so all back to normal – upgrade worked well.
Why don’t iPods have a power on/off switch? It would have saved a headache on this occasion!
I can report (happily) that the update went smoothly, that functionality seems fine, but that the head unti display is still not right when I use the iPod UI for the ICE>Link in my Audi A3 with Concert radio.