Is there a way to detect whether iPod music is already playing when the game starts?
It only makes sense that there should be a way, since there is an option whether or not to override iPod music. Not being able to detect this means the “override” option should probably be renamed to “allow compressed audio in your game?” since if you don’t override iPod music, you are effectively disallowed from using compressed audio in your game - unless you trust that your players will never, ever, try playing their own music before launching your game (which will result in a crash).
In other words, unless there is a way to detect it at startup, unless you choose to always override via the player settings, it is 100% unsafe to use your own compressed audio.