I have a 2006 325i and by 8703e paired perfectly. It brought in my entire set of contacts and all are available for dialing. Further, the caller ID actually works so I can see who is calling without issue.
I did just have a "software update" on my car and so that is always worth checking on in terms of the BMW bluetooth implementation.
Finally, I cannot believe the difference in the quality of the bluetooth between the 8703 and my Treo 700P which I officially dumped a month ago with absolutely no regrets! I think my 17 year old daughter is the only kid in her high school with a Treo!