I've got an '06 BMW 330, and have been having exactly the same problems as described in all these other posts: the bluetooth connection is just about unusable. The caller continuously drops out. They seem to be able to hear me ok, but not best sound quality. My friend (BMW sales person) has a razor that pairs with my car and works fine, and my treo 650 worked perfectly before the iPhone. I will try turning off WiFi, but that is just not an acceptible solution.
Apple, PLEASE fix this!! I didn't pay all that money for the voice system in my BMW, and THEN for an iPhone, to not be able to use them.
Otherwise, I simply love my iPhone.