BMW ended up installing the glove compartment ipod adapter for me at no charge. I paid for the iPhone snap-in adapter in the console. So I have an ipod that I leave in the glove compartment and only take out to occasionally to sync with itunes. Otherwise, I just sits in the glove compartment. It charges the ipod and I can control it through the BMW idrive. It shows up under the CD changer. The different "CD" slots have different ipod options. For example, "CD" 1 may be playlists and "CD" 2 is artists etc. I don't remember the exact options for each "CD" off hand. It works pretty well. I can also still use the audio-in jack in the console if I want to listen to something on my iPhone, but NOT when the iPhone is in the cradle. Only because when it's in the cradle, there is no way to plug the cable into the headphone jack of the iPhone.
All in all, it works very well for me. It would be pretty expensive to add both of these adaptors. I'm very glad BMW picked up a big chunk of the tab for my trouble and the confusion that the dealership went through.
Annapolis BMW actually just told me to take the car and they would work how they got paid by asking BMW to cover it.