iOS 4.1 coincides very closely with when I got my X5, so I can't offer a scientific comparison, I'm afraid.

However, people noticed IMMEDIATELY that the quality was much improved over using the handsfree in my '06 GX470. To be fair to the GX, however, the quality would ebb and flow depending on which model iPhone I had (I do tend to upgrade every model) and what software I'm using. It was initially good, then not, then so-so, then not good at all again (with the iPhone 4 with iOS 4.0).

But in the X5 it's excellent. It is also a quieter vehicle than the GX was, and I notice that there are two mics - possibility of noise cancelling action going on? - on the X5 and the "aperture" looks larger, but I can't be certain of that. (sorry, I am not an audio engineer)

It also connects instantly, updates contacts quickly - something the GX simply wouldn't do at all - and it seems to work very smoothly.

I do generally run with everything closed, but the A/C will be running to some degree, and I keep my sunroof shade open most of the time.

I assume the hardware has changed since '07, but I don't know that for a fact. Anyone?

In fact, BMWs hardware changes are so far very intriguing - changing in the middle of a model year, etc. ANNOYING, on the one hand, but it's a benefit in the long run.