Jim , which Parrot kit do you have? I have the PARROT CK3100 which you can set up to Auto answer, and also activate voice recognition for outgoing calls, so gives you true hands free, mine works pretty well with my phone but I have no experience of using an Iphone with it. One thing which is easy to check is whether the mic connection is loose, mine got knocked out when I was fitting my connects2 box and just required re-plugging in, its just a plain jack plug connection
http://www.parrot.com/uk/compatibility
cheers