iPod Touch 3rd Gen and Squier Stratocaster USB guitar

I have just plugged my new Squier Stratocaster USB guitar that I purchased from the Applestore into my 3rd Gen iPod Touch (iOS 5) using the mini USB to 30 pin connector that was supplied with the guitar. On my iPod I have an app from Gibson that has a guitar tuner and all sorts of stuff that I want to play around with.

Annoyingly when I plug the Stratocaster into my iPod (either with or without the Gibson app running) nothing happens. Not even white noise.

On the latest of several occassions that I tried this, I got a message pop up on my iPod that said something like 'Your iPod is not compatible with this accessory'.

Does this mean there is a hardware incompatibility between the two devices that can't be got around; or is it simply a software issue? If so. I wonder, will I be able to use the USB guitar with my iPod Touch if I purchase the GarageBand for iPod App?