I have done further testing and believe I have found the cause.
*V-Moda Vibe Duo Mobile in-ear headset*
I listened to my music on my iPhone 4 via the iPod app with my V-moda VIbe Duo headset with inline mic. The volume began jumping within 3 seconds of plugging in the ear buds and pressing play. Blowing into the inline mic reliably reproduced the symptom immediately without fail, and the problem continued for the entire duration of my listening period with the V-modas, which lasted 45 minutes. What was previously suspected to be a volume jumping at random intervals now appears to be directly related to mic input during iPod playback.
*Bose in-ear mobile headset*
I removed the V-Modas and plugged in my less-desirable, far less comfortable and severely overpriced Bose in-ear mobile headset with inline mic. The volume NEVER jumped in over 60 minutes of listening to the iPod app on my iPhone 4. Blowing on the inline mic produced no problems whatsoever. iPod playback was not problematic at all, and even during push notifications I experienced no problems - volume would slightly detent, and I would hear the push notification sound, followed by the expected rise to previous volume.
*Post-testing Hypothesis*
Certain mobile headsets (mobile meaning "phone" and with an inline mic) will produce the symptom of seemingly random volume "jumping" while listening to the iPod app on the iPhone 4. Some will not. My V-Moda Vibe Duo's are +at least+ 3 years old, but they are far more comfortable than my Bose. Unfortunately, they produce this volume jumping problem on my iPhone 4 (not my iPhone 3g or iPod touch), whereas the Bose do not.
Other users in similar threads (search "iphone 4 volume") are reporting the same problem using certain Skull Candy ear buds. Whether they have an inline mic or not I do not know, and as I do not own any Skull Candy ear buds (and never will), I can't test them.
I can reliably and with certainty reproduce this problem 100% of the time within seconds using the V-Modas. If I cover the inline mic of the V-Modas with tape or shield it from noise, it seems to make the problem go away. The problem seems to have something to do specifically with the inline mic working (instead of being "off") during iPod playback. The inline mic should be ignored by the iOS during iPod playback, as there's no use for it (currently). Once a call is received, then it should be enabled for hands-free calling while the iPod application is "paused".
It's almost as if the iPhone 4 is trying to compensate for ambient noise sensed through the inline mic by increasing the iPod playback volume. This is actually a cool idea, but something that I personally want to have forced on me. If we could turn it off in the Settings > iPod, that would be great. But I suspect it's currently a bug.
*A Note Regarding "Push Notifications"*
Another user in a similar thread hypothesized that it was Push Notifications causing the symptom. In my testing, I never experienced this. In fact, I experienced normal push notification behavior both during problematic volume jumping with the V-modas, and normal playback with the Bose.
*A Note Regarding the "Volume Jumping"*
Previous posts (from myself included), thought the volume was jumping to 100%. It might have been in certain instances, but during my testing, I verified that the volume does
NOT jump to 100% every time. It jumps in proportion to the noise sensed by the inline mic. When my testing area was quiet, gently humming or blowing into the mic produced a SMALL volume jump. Turning on fans and my Mac's desktop speakers on a loud setting produced a LARGE volume jump, usually close to or at 100% volume.
*Suggested Solution*
Obviously the solution is for Apple to correct this bug in the next iOS release. There are three temporary user-workarounds that I would recommend. These are unsatisfactory as long-term solutions as they remove the hands-free functionality of your iPhone 4.
1) Try a different pair of mobile "hands-free" headphones if you have them, but that's no guarantee as they may also be problematic. For now, we know that certain Skull Candy (probably) and V-Moda hands-free sets are suspect. Possibly many others.
2) Use regular (as in not "hands-free") headphones that do not have an inline mic. If you do this you will not be able to make hands-free calls on your iPhone 4 as you won't have an inline mic.
3) Cover the inline mic "hole" with a piece of tape. Obviously this will render the hands-free functionality of your headset useless, but you will experience trouble-free iPod playback until Apple fixes the bug. If you use blue painter's tape it will remove easily without leaving residue.
Message was edited by: flyboym535i