So now I think Firmware 40 had nothing to do with my wheel hopping problem. The problem is with the wheel sensor module. I disassembled the remote and squirted a bit of contact cleaner into the module and no more hopping problems.
Well, surprise surprise! I peeled open the front of the U1 exposing the IR led and found it bent in such a way that it pointed to some plastic housing. After straightening it out and snapping the case back together, I now find that the U1 has much better IR power output.