I hooked the blue/white stripe wire from my pioneer head unit to the orange wire of the wiring harness (which corresponds to 'C' in this diagram http://www.installdr.com/harnesses/Mitsubishi-Wiring.pdf )
I believe thats the pink wire on the actual OEM plug?

I guess the first question is have I wired it wrong?
The antenna does go up but it stays up in all modes. I'm thinking thats normal for this head unit as there are no other 'blue' wires in the harness. And the only other exposed wire is a black/ground

The second and more important question is can I make the antenna extend only half way like the OEM unit? not all the way which is quite tall, likely to catch on things and it looks silly

Pioneer dont have an aerial wire as such, you know, one that only sends power when the radio is on... They are real cheapskates in that area, my $799.00 AUD RRP Deck is the same as yours....

The wire you are using is an Amplifier Remote wire, Sends power when the unit is on. And None when its off, Works great for amps, not for antennas.
Many install a seperate switch to only raise the aerial when they choose...
I dont know if the half height signal is a different wire, if it is a 3 way switch would do it. If its a different voltage, then that can be sorted as well. A quick search will get you the info, unless someone else chimes in...
I cant help there, I have never had a verada....

There was a diagram somewhere on the forums as to how to make the antenna raise halfway.
Not sure if I am right but I think maybe only Veradas had that wiring installed or something?

mcs_xi as always, see the last post...
http://www.aussiemagna.com/forums/showthread.php?t=81742&highlight=half+height+diagram

I rarely listen to the radio so I doubt i'll ever need it at full height (no amount of extra signal is going to improve the crap that comes through Australian radio)
So do I need to wire power to ONLY the green/white to get it half height? or both the blue and green/white at the same time?
I'm guessing the former but just confirming....

Ok so it turns out there are 2 green/white wires in the vehicle. Using the one on the main white plug won't work, there's a seperate single wire connector which plugs into the stock head unit, this is used for half height. You need to wire blue/white to blue for full height, or blue/white to white/green (seperate connector, not the one thats part of the main plug) for half height. I'm not going to bother with a switch and i'm happy to have it half way whenever the head unit is on, but if I were it would be

[Mode] - [Wiring harness end] - [Car end]
OFF - Blue/White - Nothing
HALF - Blue/White - White/Green (the isolated plug)
FULL - Blue/White - Blue

Are you talking about the 8 pin connector with 2 wires running into it?
I thought that was for the steering remote?

No there is a single wire that goes to a white plug which fits into the back of the stock head unit
It has space for 2 wires but only has 1 connected. Here's a pic of the rear of the stock head unit to show which plug/wire i'm talking about
http://i39.tinypic.com/r7ng2v.jpg

My head unit was different to that.
It is 2 piece and has a different plug