Thanks for all the replies!
I have a Sim Card in (pay as you go thingy), and the phone works just fine, and I use it for outgoing calls - great!
You guys are obviously right though, because nothing has worked in terms of getting the Iphone hooked up. Bummer!
I have a mate who has a business installing Bluetooth, Alarms, stereos etc, and he says Audi's are the worst to fit anything modern to, due to their use of individual amps etc everywhere, and to get the (my) A8 to take modern Bluetooth and Ipod connection requires a system (albeit one that will mate with MMi) is in the region of £400-£500.
So, PsYcHe, would you be kind enough to point me to your thread/write up to see what's involved in your other option?
Thanks