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Just noticed that my model ready light is flashing, can't say I've noticed before. I've droped off the Internet whilst iPlaying on the iPod a couple of times, is there a connection.
theres seems to be a few issues regarding this some people have no problems so it could just be a dodgy firmware update for modem others are affected by connection issues.
You could ring Virgin or post on their newsgroups and see if theres any issues.