Unfortunately, it appears that in doing this, they broke the Bluetooth software integration with Cars.

The BMW appears to be suffering more than others, but this is not limited to just BMW cars. Some BMW’s do work, but they tend to be just released cars, e.g. March 2008 onwards. But it is not this clear cut.

After many comments to and from Apple/BMW, according to scoopz, it looks like Apple will be releasing another software update in September to resolve this.

Feedback from various people regarding this issue can be found here http://blog.scoopz.com/2008/07/11/iphone-20-update-breaks-bmw-idrive-contactaddress-book-syncing/ if you have this problem, why not add your 2c.

Lets hope this gets fixed sooner than later, maybe they may even address the 3G signal problem at the same time.