Thanks XIIAlive Team, I went to "Settings" -> "User experience" -> "media controls" set to "off" and this cured the problem. I can still go to my favorite website to find live radio (http://tuned.mobi) and XIIAlive will start playing the stream. In the mean time my car bluetooth controls only start the "Music" app. I haven't remembered to try bluetooth start or stop commands while XIIAlive is playing to find out what happens. I will try this shortly and report back.

"The workaround for this is to remove the stock music player, but that may not be an option for everyone."

Can XIIAlive play my music located on my SD card. I don't see that option on the lite version. Also I don't think I can remove the "Music" app on my Droid1.