On E60's with the small engines and only the standard climate:
It's a temperature dial which sets the temperature the climate control is to maintain when the "Auto" button is pressed, there is no screen on the Climate Control system. It is only single zone. There is another dial where you can change the vents used (i.e. windscreen etc) manually. This overrides "Auto". There is a ********* button - light on is Air-conditioner enabled and light off is Air-conditioner disabled. There is also a "Off" button.
Yea I know, I was pointing out to Jez that the screen in the E60 has nothing to do with the standard climate. I don't need a lesson in how it works

All the iDrive does is replace the knurled wheel on the E39/E46 which controls the centre vent.