pnanada,
i have installed the avic-n2 and the avic-z1 in my 95 q45. i have xm w/nav, ipod adapter, bluetooth adapter, steering wheel remote and the 'fix'.
1) microphone placement was best when it was installed in the headliner. mines is in the corner close to the a-piller and next to the sunroof opening. i tried several placements including steering wheel (in front of the cluster) and to the right of the steering wheel.
2) your installer is mistaken. you cannot just bypass the amps to use an after market stereo. you have 2 options use the line-level outs of the Z1 with the existing bose amps/speakers or remove the bose amps/speakers and use after market speakers (or if $$$ is not object, after market components w/after market amps).
if you would like to use the exisiting bose amps/speakers then you need a line-level adapter. basically you connect the rca's from the Z1 to the input side of this adapter, then you connect to speaker line-level outs to the speaker wires of your new wiring harness. The harness then plugs into the existing radio harness and voila. The Z1 plays thru its RCA to the bose system. Also good line-level adapters have an adjustment which allows you to adjust the output (voltage). The best way to get good sound is the turn the voltage all the way down. Turn the Z1 to 3/4 volume, then adjust the voltage on the line-level adapter til you get distortion. Then back it down a notch. Also make sure you're using a sound source typical of something that you normally listen to. (i.e. no 50 cent when you're a Kelly Clarkson fan).
Another thing the metra wire harness # is: (i went thru 4 part #'s before i got the right one).
3) there are several 'fixes'. the right one depends on what year your avic-z1 was made. Pre 6/06 units can use the flashlight fix (flash your parking light, while you turn your ignition on). This is automated by using a small circuit which i think is a timer of sorts. These can be bought on ebay. If your have a unit made after 6/06 all you have to do is ground one of the pins on connecter 2. see here:
http://www.sminntech.com/z1flash.html
4)speed sensor cannot be retrieved from the ecu! you have to get it from behind the console or at the transmission. The ecu's signal is modified and will not work properly. now this might not be true, i have looked at every single piece of schematics in the repair manual. and i have tested this with the AVIC-n2. the head light (dimming) wire can be had from the after market wiring harness that you buy. i got my parking brake from the parking brake switch; but if you do the 'fix' you will not need it. i got my reverse from the shifter; there is a connecter that goes to the reverse switch for the taillights.
Also if you're using bluetooth and don't like the quality/volume here is updated software:
http://www.sminntech.com/z1flash.html
and for the record the avic-z1 is the best dvd/navigation system on the market. it beats down the eclipse which is hideous and who's navi software sucks. it might not have the best screen for a dvd player, but who can say they got a navi, lcd screen and dvd player for under 2k. BTW i got my Z1 for $1600 via ebay.