So apparently there is an issue with first-generation iPod photos and RF remote controls—something inside the iPods causes an interference in the same band in which the wireless remotes work. iPodlounge has a in-depth report from a peripheral engineer explaining the details, but suffice it to say, if you’ve got one of the first 40/60GB models, you’re up a creek. The second 30/60GB models appear to be unaffected.
iPod photo interference issue traced, explained [iPodlounge]