I believe it was in 2003 or 2004 that BMW and Apple announced that BMWs would be pre-wired to interface with iPods. Much ado was made of it but the execution left much to be wanted.
Essentially, the interface enabled the iPod to emulate the six-CD changer that is optional for BMW. This meant that you had to define 5 playlists that were analogs of five CDs. Certainly, you could create long playlists but being able to truly enjoy an entire music collection on a 30GB iPod was seriously hampered by this limitation. The design requires constant interaction with iTunes to modify playlists to take advantage of the capacity of the iPod. It was a neat idea with lame execution.
I've been struggling to find the ideal interface for my music player now that I have shifted from the Dell that died to the iPod 30GB Video. I used to be content with the Belkin FM trasnmitter but after it fell to an untimely death at the hands of spilled Beaner's, I replaced it with the iRiver transmitter. But then I found out about Harman Kardon's most-excellent Drive and Play system and coveted it for a while. I was on the cusp of buying it and I even have my CFO's approval (that would be my wife), but for some reason, I decided I wanted to wait. Perhaps my BMW radar was finely tuned to BMW NA headquarters in New Jersey and knew to wait for this design. Or maybe my decision to not buy the H-K system had nothing to do with this announcement.
In any case, I'll "suffer" through the iRiver FM transmitter until July.
The following is quoted from the BMW press release that announces a new interface available in July 2006.
The new BMW Interface for iPod will be available for owners of the new BMW 3 Series Sedans and Sports Wagons as well as the 5, 6, and 7 Series. It will also be available for the new M5 Sedan and M6 Coupe. It will enable audiophiles to bring their entire music collections with them, plug directly and effortlessly into a superior sound system while maintaining uncompromised control over their driving experience. Since the new Interface is compatible with SIRIUS satellite radio as well as the recently introduced HD Radio, owners will be able to enjoy a broad selection of high fidelity broadcast music sources as well. The original BMW iPod Adapter will continue to be available for 2002 and later BMW models: X3, X5, Z4, and previous generation 3 Series.
...The seamless integration of iPod makes it effortless for drivers to control their music through their existing audio system and the multifunction steering wheel. The new BMW Interface for iPod enables drivers to easily access their entire music library, shuffle songs, skip between tracks and adjust volume -- all of this with no loss of sound quality or driving control.
The new Interface is compatible with all iPods with a dock connector, including the iPod nano and the fifth generation iPod. The BMW iPod Interfaces integrate the iPod through a direct connection in the BMW glovebox, providing outstanding sound quality and constant power to the iPod all while your iPod remains protected and out of view.
The new BMW iPod Interface will be available for customers to purchase at BMW centers beginning in July 2006. Pricing has not been determined.