The new Benz device couples the iPhone directly into the heart of the Mercedes' audio brain, so it can switch from calls to music quickly. The steering-wheel controls on Mercedes vehicles will control the iPhone's functions, and the adapter keeps the Magic Phone within view of the driver (not always a great thing). It also charges the iPhone on the run.
Right now the iPhone kit's a German option, celebrating the addition of the phone to the T-Mobile network over there. You can tell this one's not in a U.S.-spec Benz, since there's no 64-ounce Chick-Fil-A cup in the holder. It's offered on the C-Class, E?Class, CLK-Class, CLS-Class, S-Class, CL-Class, SL-Class, M-Class, and R-Class, and will be offered with the new GLK-Class when it goes on sale in October. It's a $385 option in Germany; stay tuned to see if it's offered for U.S. cars.