For users with the iPod integration in the ARMREST:
Initially, the iPhone, when plugged in gives you an error warning message that "this accessory is not meant to be used with the iPhone, would you like to switch to Airplane mode".
Once the iDrive and iPhone systems initialize together, your playlists and songs show up without a problem.
I briefly played a song. What happens is that the iPhone can be used like normal, but when you click on the iPod icon, a white screen says "In Use".
When the phone is in its standby (not home) screen, instead of your background, the album art associated with the song shows up as the background and changes for every song... pretty cool.
When making or receiving a call, it shuts off the iPod and makes the call. I haven't tried yet, but will tomorrow, keeping bluetooth as well as the iPod connected to the stereo - meaning to see if the iPod changes seamlessly to Phone when a call is attempted or received while playing iPod music.
Songs showed up and loaded much faster then Hard Drive based iPods.
Hope this helps, and answers MOST questions!