My app uses NSTimer and it appears that NSTimer doesn\'t fire when the iPhone goes into the stand-by mode (either by pressing the hardware button or by the idle timer).
I used the information on this post for a small sample that I was building. This is the code that I used when I initiated the playback to prevent the audio from stopping:
AudioSession.Category = AudioSessionCategory.MediaPlayback;
And when the application is done with the playback to reset to the original value:
AudioSession.Category = AudioSessionCategory.SoloAmbientSound;
The full sample is here:
http://github.com/migueldeicaza/monotouch-samples/tree/master/StreamingAudio/