I received some Beats by Dr. Dre Studio High Definition headphones this morning and am having problems with the Isonitalk cable / switch too.
For all intents and purposes, pressing the button seems to get random results - temporary lowering of the volume, start / stop / skip tracks. It doesn't do much of what it's supposed to. I figured I had a faulty cable and took the whole lot back to the shop.
The shop asistant was able to demonstrate that my cable worked fine with his iPhone 4S, but trying several new cables on my iPhone 4 failed to solve my problem. Therefore it's something specific to the phone. And my partner's phone, and seemingly you guys too!
Monster's customer support here in the UK insist that the headphones ARE compatible with the iPhone 4 and don't stipulate firmware / IOS versions, so everything points to an IOS 5 bug.
I'm trying to use mine with iPhone 4, IOS 5.0.1.
I'm cheesed off at this moment in time, as the headphones were my Birthday present 😟