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My iPod is completely controlled by the iDrive, and very well, including album art, with only the standard 30 pin cable (btw, radtech makes some nice shorter cables).
I've found that if I switch the car to radio before I turn it off, when I come back and switch from radio to iPod, it's working fine.
It has to be a startup issue. I think the car remembers that it's on the xth song in the list, but forgets what playlist it is in, so it just displays the default info or something. Like it's in USB mode to start, vs iPod mode...
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