Is there a setting either on the iPhone or the PiP that you can do that when you plug in the phone it doesn't automatically change the audio source from FM to the iPhone?
It's a bug in the Entune software. See this thread. If enough owners complain to Toyota about it perhaps they'll fix it.
yeah not much else you can do. i'd suggest getting a dedicated 12V USB charger anyway. toyota's supplies only 500 mA, but the iPhone can take up to 1 A.