+1 . . . only volume control can be done via the steering controls, everything else via the iPhone.
An interesting feature - my iPhone 5 establishes two BT connections - one with BB Music Gateway for music and the other with the car's BT (X5 MY2011, June 2010 build) for telephone. When a call comes in it does the right thing - mutes the music BT and the phone works like it always did via the car's speaker/microphone and you can hang up using iDrive, etc. Once the call is completed it flips back to the BB Music BT and resumes the song.
I suspect this switching back and forth feature between two BT channels is phone specific . . . may not work the same on older phones.