I have a 3gS iphone on OS4 in my 2009 535ix via the center arm rest plugs and have full functionality through the idrive system. Ipod part actually now includes a display for playlists with the OS4 upgrade that didn't display before.

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2009 535ix, Jet Black/Cream Beige Dakota Leather, Light Poplar wood trim, Active Cruise, Keyless, Logic7, Cold Weather, Premium, Nav, Xenon
2000 528i, Titanium/Black leather, Cold weather, Premium