There should be an orange wire on the loom from the stereo this is the feed that tells the stereo your lights are on make sure this connected to the corresponding wire on your car loom. also make sure this function is switched on on the head unit as sometimes it's a option!
I have a similar problem with a Blupunkt. The answer their tech department gave was that most new cars have LEDs lighting the dash. You can't dim them in the normal sense of the word. They are dimmed by switching them on and off quickly. So to match the amount of dimming the dash does, the pulse down the wire is used to control the level of dimming on the head unit.
And if you have "Normal" bulbs in your dash then the lead is permanantly live when the lights are on, not pulsing, so no dimming.
It must depend on the make of head unit then! Normal the orange wire becoming live (i.e when the lights are on) lets the head unit dim it's display it's self with it's built in dimmer. Well it seems to be the case with pioneer and sony anyway.
thanks guys - i think the dimmer wire is blue/white on the stereo loom and it goes into a green/white at the cars ISO.
I'm assuming that this function just makes the screen go dim when you're not pushing the buttons- the display at the moment is quite bright (bit over-powering at night). I have made sure the option for 'dimmer ON' is activated in the Menu.
Looks like i'll be givin old kenny a call! (if he were still alive)