Well, I was another Apple fan that the company has just p*ssed off. OK, I accept that the 3G iphone now won't charge in my '56 Merc CLK, as they have cheapo'd the handset and cut the 12V firewire charging pins (conveniently used by many car systems). And that the battery on 3G doesn't last a day if I actually USE the phone - so I guess I'd have to shell out for a charger, even though the iPod Merc integration did it perfectly well on the old one.
I foolishly upgraded to firmware 2.0 on my iPhone EDGE, and discovered that neither it (that worked perfectly on 1.1.4) or the bl**dy 3G works with the Merc hardware now. Nice one, Apple!
In fact, I have gone back to my iPhone EDGE. It's smaller. Its battery lasts. It charges in the car (and on my Bose sound dock). Thanks to Apple's refusal to allow you to roll back the firmware, you have to hack the phone to restore it (the firmware is easy, but you have to downgrade the baseband as well - from 4.05.04_G to 4.04.05_G). Still, now I've been introduced to iPhone hacking I'm not dependant on Apple any more - yay!
I'll be on EDGE until Apple can make their 2.0 firmware work in my car. I refuse to upgrade the Merc hardware - Apple caused this problem with their firmware, so they can sort it out. Don't hold your breath though!