the line in is indeed one that accepts headsets (at least for ipod touch, i know).  Mine does that too (when i plug it in), i thought that was just what happened when you plugged into things while the amplification is on.  Is it doing this constantly?

Is the headphone out one of those that can also accept a headset with mic?  If so you may be getting the contacts bridged and signal going back to the phone and causing problems, especially if your mixer is set up to take TRS type plugs.

edit:  what prof said...

im guessing something is touching the serial pin that controls the headset? Maybe something like this would be safer:

http://www.prscables.com/guitarbud

I appreciate this is only tangentally chip but I occasionally use my Iphone for music related stuff and I also plan to keep my set on it incase of dire equipment failure. I have a bit of a problem though, whenever I plug the headphone out into my line mixer which then connects to powered speakers, the iphone makes a wierd "popping" sound and the volume slider jumps about all over the show. Anyone have any idea what might be happening?