I got the iPhone fully integrated with the M3, and I must say WOW! All I do is plug it in the center console, I am not sure if you don't have the premium package, using the USB port and forget it. All controls of the iPhone are controlled by the M3. I just dial to a name in the contact list and press call, the iPod feature is fully functional including the artwork of the song on the screen.
If you don't have an iPhone, get one, you won't regret it. Also, since I write iPhone apps(I have 25), you might as well by some of my apps....
BMWM3RED