Hmmm... had a look at the data sheet, and it's pretty much fire and forget. There's little you can do to tweak the behaviour of the tuner itself, so why the unit doesn't grab a signal cleanly, I don't know. The module itself is used in various Philips RC and RM series radios, and from my own experience, quite successfully. About the only influence I can see that might affect the module's performance is the source impedance of the antenna. This does tend to imply that smart software could improve signal selectivity and the unit's ability to seek and tune on the centre frequency of a stereo station.

What seek sensitivity are you using? How do you manage to extract RDS data?