Just took delivery of my 1M with idrive, BMW Apps, and 6NF smart phone prep.
I have had iPods integrated into my car audio since Mini released the iPod integration in 2004, and have been happy with it ever since. I also had a 135 w/o iDrive, but did have the USB, 6NF smart phone prep, and with this car made the leap to add iDrive, I have read the manual and played with it all week and here is what I have figured out re my 2011 1M:
BMW supplied Y cable - works with all iPods I have (4th gen, 5th gen, iPhone 4) but none display album art.
Apple USB cable - works with all iPods I have (4th gen, 5th gen, iPhone 4) only displays album art on 5th gen and iPhone 4. No artwork displayed on the 4th gen, I assume b/c it does not display that info on the monochrome screen, so itunes might not load that info to it. Of note I did a back to back test and the album art on the iPhone 4 is a lot better quality that that of the 5th gen iPod, the 5th gen iPod album art is almost blurry, and a little smaller than the iPhone 4.
Basic BMW snap in Adapter (not the media one): Works with my iPhone 4 (it is actually the original iPhone snap in adapter that I modified so the 4 would fit in it. But album art is not displayed. Really I have never been impressed with the snap in adapter, the phone gets really hot when plugged in to it, cell reception is not that much better, and for the cost ($100 to $250) it is not worth it just to get rid of a USB cable. I got mine thrown in from my dealer when I got my 135, after 10 minutes of using it I wished I had asked for ANYTHING else, trunk mat, umbrella, hat, key chain, a punch in the face, valve stem caps, etc.
I have thought about getting the media adapter so I can take "full advantage of Apps" but after reading more about it I have decided not to. What I read was that you get access to the iPod interface for music rather than the BMW interface, but doing this eliminates your ability to use the split screen, fail!, and you can play back video, not sure i'm that excited about that either. Then you need to snap your phone into it each time you enter and leave the car. Ok for long road trips, but I tend to just turn on BT and leave it in my pocket when I am driving around town and going to and from work.
Bluetooth Streaming - works with my iPhone 4, album art is not displayed though, audio quality is good, and you can see the artist and track info as well as advance to the next song using your car's controls. Call quality is ok, and the feedback I have received is that it is the same as it was in my 2009 135, OK but not Excellent my wife said the other day.
BMW Apps - its ok, at this point, I'm not 100% sure its worth the $250. Pandora works well enough, you can see album art, thumbs up, thumbs down, stations, all on the iDrive screen which I like, but if your passenger wants to use your phone to look something up, say a place to have breakfast, the app stops as soon as you switch to a different app on the iPhone, so multi-tasking is dead. Web radio is cool, I have a few stations in my list, and the quality is decent. The Facebook app is kinda gheto, not sure that is where I would have spent my development time on this app if I were BMW, then again, I'm not a huge Facebook user. The last mile navigation is cool, you can direct yourself on foot after you park, but no better than just using google maps on the iPhone.
HD based music storage - the new iDrive has a build in 12GB HD, you can upload music to the HD via the USB port in the glovebox. Works well enough, music quality is good, but I could not get album artwork to be displayed. I would probably do this rather than an iPod if it were not for the artwork, I just think that is a cool feature.
iPhone4 and iDrive - I'm disappointed that contact photos are not displayed when making a call. Also you will not have access to text messages, or email with the iPhone, these features are not supported, this is buried on BMWs website and took me a while to find it. http://www.bmw.com/bluetooth
you do have access to your calendar though as part of BMW apps, the above site says that is not supported but it works, so there is hope that some of these other features might be available in the future, not sure if the hold up is apple or BMW as many of these features work on Blackberrys and HTC phones, or so the website says.
Right now I have the 5th gen iPod hooked up with a Apple USB cable, and just leave it in the car. What I think I am going to do is either get a used iPod touch, or use my iPhone (deactivated as basically just an iPod) once I upgrade to the 4s, with the Apple USB cable and just leave it in the car (the crappy album artwork on the iPod is killing me). The cool thing about this now that iOS5 supports syncing over wifi is that when my car is in the garage, I can probably update music on the touch without removing it from the car, and the touch should have the same quality artwork as the iPhone and If i ever have a need to listen to Pandora or web radio i'll just plug my phone in, but likely won't mess with that day to day, just for longer trips.
Hope this helps, I know the manual is a bit thin on this topic, and there is spotty info on the web, its all there, just not in one spot.