Works perfectly with the iphone 3G. No errors or messages when you plug it in, despite other reviewers problems with this. I got the latest 2.1 firmware which could be the reason why.
Press play on the charger and it switches to ipod. Make a call and it mutes the ipod while you are calling. After you hang up, it returns to the ipod. Hi-Lo switch works well and helps bringing the volume of the aux input to the same level as the radio or CD.
Best of all, I got it from amazon for £15.50 including p&p so a real bargain.
A must have add-on for the iphone and the 1er.