We have a 2005 3.0 with Nav, but no pairing button. Per the manual, the bluetooth goes into pairing mode for 2 minutes after the car is turned on. I'm not sure if that means power only or fully on, but I always start the motor, and it doesn't always seem to pair on the first try.

FWIW, my wife has been through 4 or 5 phones is the past 6.5 years with the X5. One phone, Moto Droid X2 was terrible, and after emails and phone calls to Moto support they finally said the car was incompatible with the phone. Total BS. That particular phone has a very poor implementation of Bluetooth. I got her a Moto Droid Bionic and it works great with the X5. Another 2005 X5 owner who I met on Moto support forum reported exact same problem with Droid X2, and he upgraded to Droid RAZR and emailed me that phone works great with his X5.