Wow, a very nice summary, finally. There seems to be a lot of conjecture on this topic. From what I have seen, everything you say is correct. I've seen screenshots of the interfaces, and from what I've seen you DO NOT get album art displayed unless you have the enhanced USB. Additionally, if you have BMW Apps and have the iPhone cradle, you get a fancier more iPod looking interface.
Playlists work in any situation above, although I've seen threads where people had trouble creating them correctly on a USB stick.
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