I think I misread the question. I didn't notice you saying it doesn't work with regular headphones. I'm not sure what it could if neither a standard cable or headphones works. I don't know of a setting or anything that would cause this problem.
I just got my iphone a few days ago and i love it however the FM transmitter stoped working(which was a "works with iphone" accessory)but it still charges the phone.So the cables work. Did any of this happen with yours?