The update that they're referring to is the latest for the radio and not for Uconnect.
1) The skipping that you're having will be fixed by doing the Uconnect update, after the first update is done, then there is a 2nd Uconnect update that enhances BT streaming audio.
2) You're correct about using the USB connector in the glovebox and not on the radio. This is because the radio itself doesn't support media devices other than a thumb drive. The Uconnect USB connector is what supports the media devices.
3) go this link and you'll find my thread with the 2011 updates. http://www.ramforumz.com/showthread.php?t=127060&highlight=2011+uconnect+update
4) I have seen people have issues with the update being applied when they tried a different thumb drive. Try a different one.
Well they didn't do any updates. The service guy said the latest update messes up the radio and dodge has told them not to load it because it basically makes the radio a brick. He said to wait till the next update. I have check some of the functionality of the streaming and it sounds like a skipping CD. When I turn the screen off on the phone it plays normally. When I get a message or something and the screen turns back on it goes back to sounding like a skipped CD. It seems to do voice commands as it like voice dialing. That seems to work alright. I haven't checked plugging phone into port yet to see if its recognized yet or not. When I do that don't I have to use the port in the glove box and not the port on the radio? is that correct or was I dreaming? I thought I read somewhere it had to be the glove box but maybe I'm mistaken on that. That's where I am in this whole process though. I thought I saw the update for the skipping and tried it but when I did it said something like used digital signature doesn't match library or something to that effect. I'm doing a restore on my phone right now when that's done I'll try plugging into port and see if its recognized.