The dealer cable includes an interface to give Serial connection to the ipod.
This way it uses the ipods menu, and also directory. It doesnt put it into Hard drive mode, this is what happens when you use the normal ipod cable. Using the standard cable the car will read the file structure. Using the interface cable the car will read the ipod structure.
Pretty important as if you use Apple Macs, then the car cannot read the directory without the interface cable! I believe its also important if you have a lot of DRM music. As you are playing via the ipod it works fine, but if you are using a normal cable you cannot play the music, I think? Anyone confirm this?
Hope this helps, had a long discussion with a clued up dealer. Forgot to find out if the cable was free though, although they did order it without telling me any cost. I have heard that they need to order it against the VIN then its free, don't know how true that is for UK cars?
BMW E93 320i M Sport - Black Sapphire / Coral Red