Has anyone been able to use the Iphone as both and Ipod and a phone in an e61?

Thanks

Yes and it works perfectly on my 2008 535i. This is one of the most useful and seamless technology integrations I have experienced - and a real reason to select the iPod/USB integration option (or a BMW for that matter)! Make sure you get the actual USB port option with the iPod male plug. I have heard some dealers call the audio in only option "iPod integration". With the latter option, the iPhone or iPod will play music only, but you can't access to your playlists, etc. I had the Audio in option only on my 2006 530xit and the iPhone played music just fine, but misbehaved with bluetooth phone calls.

Here's my use case in the 2008 535i with USB/iPod option:
1. Plug in the BMW USB/iPod plug to the iPhone. Bluetooth pairing also completed.
2. Select AUX in the Entertainment menu using iDrive or Voice
3. Select my favorite playlist using iDrive, music starts to play
4. Make a call using voice, "dial number"
5. Music pauses and the call is placed via Bluetooth integration
6. Call finishes and music starts where it left off.
7. Receiving a call is also seamless and the music fades nicely before you hear the ring tone. Incidentally, the iPhone ringtone is also played on the iPhone itself.

It's a great combination and I highly recommend it on the 2008 535i. Good luck!