With the first question, if you are using an ip-bus to RCA adapter to connect your iPod to the CD changer port on the back of the radio, it won't be recognized until you turn on the AUX function on the radio. In the main function menu (usually gotten to when the radio is powered off), there is an option to turn on AUX1 or AUX2. Do this (consult owner's manual) and you should get your audio to play through.
With the 2nd question, the errors may have something to do with the file format on the discs. Not sure though.