(I did software testing for a living for many years.)
I doubt it's software. See http://priuschat.com/forums/gen-ii-p...s-working.html and more specifically http://priuschat.com/forums/gen-ii-p...ml#post1123249.

It's intermittent and I've personally hit this a few times. After the above hint, I've "fixed" it by pushing on the left side of the stereo's faceplate.

 

Thanks guys for your advice. I'll consider these options and let you know if one of them works.

 

Wife 06 Prius had this same issue 2 months ago. Carmax warranty took out radio and sent back to Toyota factory for repair. Radio returned with simply stating it has been repaired and Carmax installed it. Worked for about 1 week before it did it again 2 x in 2 days. Appears to be related to hot days.

I put my OBD scanner on the car, no error codes so does not appear to be detected by master computer.

 

When I google for "toyota radio volume control not working", google finds "About 3,360,000 results". The ones I peeked at, are mostly complaining about the radio not working -- not just a coincidence of having a lot of words in the search term. This seems this is a problem for quite a few people, and not just in Prius products.

Intermittent electrical problems are usually due to one of two common problems: corrosion on the contacts; or a foreign object creates a short.
Foreign objects are often either (conductive) dust particles or water droplets.

Moving the electrical contacts often solves the corrosion problem by abrading the corrosion. Contacts can be moved by wiggling the connector, or operating the control, or sometimes by moving the whole unit.

Water will evaporate when warm, dry air is applied. A hair blow-dryer works well, if there is a way for the air to enter the device. (But then, you have to find a way to keep it dry.) Keeping the windows closed when parked, and using the air conditioner when driving, helps a lot to keep things dry.

Dust is more difficult. Blowing compressed, dry air into a connector will often move the dust particle. However, the particle then moves to another place, and may cause a different problem. Using a vacuum instead of compressed air can help to prevent that, but only if you can get the vacuum tool into the location. If you don't have a miniature vacuum cleaner, a length of small plastic tubing can be taped to the smallest attachment on your big vacuum cleaner.

 

My 06 does this on occasion! [volume *** not working] Play with it a bit and all is fine, weird!!! The steering wheel volume however always works.H

 

I find it HIGHLY unlikely you'll get ANY error codes due to this.

pEEf might be able to fix this, see http://priuschat.com/forums/gen-ii-p...ml#post1267055. Besides fixing this, he fixes bad combination meters (speed and odo) and runs http://evseupgrade.com/.