BMW's iPod set up is not $400. Yes, the wire comes into your glovebox, where you hook up your iPod. The iPod stays in your glovebox, and you control everything from the steering wheel controls. Go to
iPod Your BMW.com for more details.
I don't have ICELink, so I can't answer your other question. Do a search on this site for ICELink, and you should get some good responses.
Juan