Not sure about the sound quality difference. The $500 6FL factory installed I-Pod option allows you to control the I-Pod through the I-Drive and song info. is displayed on the I-Drive screen and it charges the I-Pod as well. The AUX. armrest input does none of the above, it is just a simple input, all I-Pod functions must be controlled through the I-Pod.
Whether or not the added functionality is worth $500 is a matter of personal preference.

There is no sound difference : Even with the USB connector, the sound signal is transmitted through the Aux interface. The USB port is only for the display and the iDrive command.

See the special cable you need :

http://images.forum-auto.com/mesimag...mage%20453.jpg

Another option is to get an iPOD dock to 3.5mm jack cable (improves quality over that on the earpiece) and just let your iPod shuffle the songs.

Cleary not as good as full integration but an acceptable interim position for me until my dealer's techs work out how to install it on other folks cars before touching mine!

As far as sound quality is concerned. Anytime you plug an ipod (as the source) into another component using the headphone jack on the ipod you will have inferior sound quality than if you plugged the ipod in using the connector at the bottom, which then gives you true line-out output. My understanding of the new BMW ipod/USB interface is that it does connect to the bottom of the ipod (and thus give a superior sound quality over the previous simple glovebox aux input solution) and the other end plugs into the new connector which has a 3.5mm jack for audio and a USB jack for power/data.

I don't disagree, but what I'm saying is that there is a half-way solution out there which gives a bit of an improvement without getting the BMW kit.

any idea when will the dealers get it for installation

UK dealers already have them and the E70 isn't even launched yet!

I am using the Belkin adapter with built in amp which helps me equilize the volume so there is no jump in volume while connected. IT also allows one connector to the iPOD for power and sound and splits it out in the center console.

http://catalog.belkin.com/IWCatProdu...duct_Id=193794

for more info.

According to X5FX I don't have the 6FL, but I do have control through the Idrive and steering wheel. If this is the case, there must be another option installed by the dealer. Mine works the same as what Genearch mentions on page one.

You said earlier your Ipod is controlled via CD Changer, this is the older option (which is still available as an add-on by the dealer).

6FL is controlled thru the AUX input and has better options (but it is only available w/ new car order).