Weird...
I haven't come across that problem, on multiple iPhone 4's.
Does the pause button work for you? Also, try aiming your touch at different parts of the player. i.e. i think near his feet might have a higher contact area. Or try more to the left, or more to the right of the player.
Maybe I am so used to it i know exactly where to touch.. I am very interested to know how and where you are touching it, holding the phone etc. maybe i haven't accommodated for something.