So I tested with the old version of Live Moble 1.1 on IOS 5.1.1 (wife did not update her ipod touch) and it works with SX 6.31. When I updated that ipod to Live Mobile 2, I get the same issues as with my IOS 6 ipad. The connect button presses and does not say "connecting" and it just stays on that first screen and does not connect.
So SX 6.31 works with either OS and the old 1.1 live mobile. The new live mobile "connect" button appears to be the issue. Good news is, that should be a simple fix. I hope...