Thank you for the conformation,
The issue regarding the USB Interface connectivity is Resolved in iOS 6.2. Apple identified the issue and resolved it. The was associated with Apple iPhones and iPads using a compatible Multiport Adapters that support USB connections to Audio Devices like a USB DAC, etc.
The issue regarding Audio Output Distortion is Resolved. Peter provided a thorough explanation of the scenario. It is not directly associated with Stage Traxx. In my case, It became more noticeable when you Slow Down a Song with increasingly Larger Percentages. I am an Audiophile and more sensitive to these types of audio artifacts. Peter also suggested that that you may possibly use an App with Tempo Adjustment features without changing the Pitch of a Song and then add that Song to Stage Traxx.
Peter, Please feel free to make any edits as required. I would also appreciate your assistance in Posting this as "Solved" when you have time. I did not easily see a way to do it.