The distortion is not fixed so far, but will be in a later release.
You may notice that the slider has two positions, half and full up/down. You can use both psostions for browsing and menu moving. Full gives fast response, half gives slow or single response.
The problem with counting of files is not fixed so far, because I need to find a "nice and easy" way, but will be done later.
Permanent volume control is already implemented in this version, slider half up/down is used therefor. Please refer to the documentation, "Related Pages".
The USB problem will be fixed in a later release.
Did you asked Microsoft for the USB problem?
I can not do any test because of lacking Vista installation. And I will not install before release of SP2
Please specify "flickering". I didn't notice such problem on my two yPod's.