AUX in Toyota Highlander and iPhone are not working...

First, it sounds like you're using the earphone output to supply audio to the Highlander AUX input. And although you can certainly do this, you should instead use an AUX output, sourced from the iPhone's dock connector. This will feed AUX output of the correct impedence and level to your SUV's AUX input, and will be of much greater quality.

Second, you didn't specify, but I suspect you're using a physically non-compatbile audio cable to connect to the Highlanders' AUX. That is, the iPhone side of the cable probably has a connector that does not fit (properly mate) into the recessed one in the iPhone itself.

For the dock AUX audio output, you can use a SendStation PocketDock Line Out USB, available here:

http://www.sendstation.com/us/products/pocketdock/lineout-usb.html

I called support about this issue nd they had no idea how to resolve this. The issue is that the I Pods worked on a standard plug ( 2 contact sections) and the I phones work on a Plug (see your earbud) that has 3 sections. I looked on the Website aht I find something called Apple iphone TTY adaptor that looks like it might work. Does anyone know if the standard mini jacks are TTY's? I am really suprised that Apple let this issue go forward, as everyone and their Brother is going to try and use these I phones in their car to replace the I POD.

I travel and want to use my BoOSE with the I Phone. Really now, can't Apple solve this MAJOR issue by explaining what to do? and anyway, why a different Plug???

I too had this problem in my new Toyota Tundra. Went to apple store and they said some mini plugs have plastic that is too fat in diameter just above the mini-plug and will not push in far enough. I bought the retractable cord made by Belkin. I like it better than my old one because it is only as long as you need it to be without all the extra wire laying around the center console. Solved the problem and sounds and looks good. I was also pleased that it (and other cables that are now being made for the iphone) worked with the Contour iSee protective case.