I'm not an expert in this, but let me add my £1's worth
The car kit cradle has two purposes.
1. It provides you with an interface that allows you to purchase (from Audi) a range of mobile phone specific docks. Its quite a limited range, mainly older phones, however they have added the iPhone 3G and iPhone 3GS (note two different docking cradles) I'm not sure of all the features supported by the iPhone port. Charging for sure, along with DIS support, MFSW control etc. There is no physical connection for the sharks fin aerial on the roof, however I believe there is an induction type interface which allows the iPhone to utilise the roof aerial. Not quite as efficient as a physical connection, but better than no connection at all. The iPhone does NOT support remote SIM Access Profile (rSAP)
Biggest pain I find is that the number of characters supported by the DIS is quite limited. If you have an address book contact named John Smith and another named John Smitherington both will only show up on DIS as John Smit... if your lucky! (on the A3 with just DIS. I think RNS-E owners are better off) Adding the cradle doesn't improve what you see on the DIS.
2. All modern mobiles now have Bluetooth built in, and all to the same Bluetooth standard (I know some people have various connectivity/address book issues but not going to address that here) That's one reason why Audi are not churning out phone specific docks. Bluetooth can do almost everything the dock does with two exceptions: Charging the Phone and connecting the phone to the external aerial. But even Audi (and the mobile manufacturers have thought of that:icon_thumright
Remember the rSAP function mentioned above? (that the iPhone DOESNT have?)
Well rSAP allows, via a Bluetooth interface, your incar kit to access the SIM card inside your phone (hence the name rSAP) It can transfer all your contacts from phone to car kit (just like regular Bluetooth) and it uses your SIM card to make a call over the operators network (just like bluetooth) BUT it places your phone into a sleep mode (saves your battery life) and uses the roof mounted aerial to place the call which "normal" non rSAP bluetooth cant do.
Of course providing rSAP comes at a cost. The rSAP module from Audi is about £300 (and plugs onto the cradle already provided as part of the phone prep) and not all mobiles have the rSAP feature built in (but lots do) The Audi module supports any phone that has rSAP functionality - but it doesn't give you somewhere to securely hold the phone! It is an expensive option, but if your keeping the car for a while, you only have to ft it once and you can change your phone model as often as you like (as long as its rSAP enabled) If you buy a dock for every phone you get that could work out even more expensive at around £100 a pop.
Details on the Audi rSAP module on the below link>
http://www.stokeaudi-parts.co.uk/products.php?product=RSAP-Phone-Adaptor
NewburyA3Q