I just got my treo 650 yesterday, and I thought I'd share my experiences since when I searched the forums, no one mentioned exactly what I was looking for.

My equipment:
Treo 650 (Unbranded and Unlocked GSM) from Palm
- Firmware 01.28
- Software: Treo650-1.13-ROW
2006 BMW 525xi - August 2005 Production
- No Navigation

Initial Setup Steps on the Treo 650
1. Go to Bluetooth application
2. Click "On" for bluetooth
3. Set a device name
4. Set discoverable to "Yes"

Then I went into the car, turned on the ignition and performed the following steps
1. On the Treo, click "Setup Devices" button in the Bluetooth app
2. Click on "Hands-free Setup"
3. Follow the menu to set up with the BMW. Select the BMWxxxx (forgot the number) device.
4. It will prompt for a passcode. Enter any passcode
5. Enter the same passcode on the BMW

That was it! At this point, the pairing was done, and all my favorites were transferred over. Here's the list of things that I was able to do:

1. Make calls using the Treo
2. Receive calls, and accept using the iDrive
3. Make calls using the iDrive by dialing a number, or by selecting a contact from the favorites
4. Make calls using the voice command by speaking "Dial Number" and also by using "Dial Name" after adding names into the phonebook.