welcome and supa clean bimmer!
i read that the ipod integration with BMW's isnt the best and that you can only play premade playlists or something like that, so im not completely surprised about the issues with it. glad to hear you got the others ones worked out tho. What was the name of this good dealer? props out to them.
there is just a general UI problem when dealing with as much media as one can have with MP3's while most people think that the ipod UI is the best they have ever seen, i do not think it is the best ever created and i have seen a number of different ways to interact with that much media. each have their goods and bads, but none really shine IMHO. in fact, i would be hard pressed to name any interface, whether it be in a car, on a portable device, or on a computer that makes dealing with thousands of songs easy.
a car produces a whole other slew of problems because of the fact that dealing with so many songs takes you away from what you should be doing, driving. but we gotta have beats in the car, and the ipod integration is one of the better way of goign about it.