It's working great. I could be wrong, but it seems to store it in some sort of cache or permanent RAM, because it loads up quickly -- nothing like as long as it took the first time I plugged it in, which took quite a while for my playlists to populate the list.
The only issue I had to work out was that my master playlist kept defaulting to sorting the list by Genre, which is useful, but I want the master list to just be songs by Artist, A-Z. I had to experiment with exporting the playlist a few times till I got it right. One of the sorting options in iTunes is a check mark, which shows you the song order numerically sorted... and this seems to be how a device like the iDrive sees the list.
I like the fact that I can have some .wav files mixed in for full CD quality. Too many would get unruly due to the lack of metadata, so i just use it for the songs where fidelity really matters.
I guess I'm done futzing with the music part of the car. Need to find something else to tweak now
On to mastering the voice commands...