Ipod adapter vs smart phone integration for iPhone

[anatolych]

I ordered my 2010 X5 3.5D, but one thing still bothers me. Both me and my wife have iPhones, and need a hands free device in NY. Ordering smart phone kit adds up to $550 because you need both the kit and iPod adapter. On top of that my CA is saying you need another accessory (which I think he is just wrong). I am already paying for BMW Assist that includes BlueTooth, so extra $550 sounds like an expensive charger in terms of additional functionality. Does anyone has any experience with this?
Separately, how does the accessory iPod interface adapter differ from the iPod USB adapter package? do you need both?

Thanks everyone

PS. I am glad they are rolling out HD-based Navi on 2010s. That was my biggest fear that we'll get stuck with the old dvd system. I don't care much for styling changes rumored in a few month. Unless they come out with Audi-stile LED eyelashes on the headlights, which I can't see BMW doing.