Yeah I did a little more Googling. As it turns out, that feature is not available if you have the Nav system, in which case the contacts are downloaded from your phone and read as you indicated. So you just say Dial "John Doe" and it will search for a match in your contacts. In theory, that sounds great. However, it doesn't always find the right match. I wish they would have kept the other featur allowing you to create the Voice Phone Book.

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In the garage
2008 Infiniti G37S Coupe (Traded)
2011 BMW X5 xDrive35i
2011 BMW X5 xDrive50i