BMW is the first car manufacturer to announce support for a feature in iOS 4 called iPod Out. CNET reported last week on this new iOS 4 feature:

This feature allows a connected iPhone 3G, iPhone 3GS, iPhone 4, or iPod Touch (second or third generation) to output and display an iPod interface on a connected device's external screen. That device, in this case, would be a future BMW or Mini vehicle. Rather than displaying BMW or Mini's iPod interface, the connected vehicle would display Apple's own interface, which will be controllable with the vehicle's controls. Users will be able to control the iPod's music playback and browse their music catalog, playlists, podcasts, and Genius mixes.

Here is a BMW video showing it in action: