BMW Nerd! Well until Fox shows up...
What else does this app do? Also, how does it communicate? Does the car have some kind of sim card built in, meaning if you did it somewhere 'out of service' then you're still screwed? :}
will surely use bluetooth?
Nope.
The iPhone App is new, but it's all built on the existing BMW Connected Drive Assist & BMW Connected Drive Online.
How it's always been:
The car has it's own GSM SIM built in. The cars SIM is used as a data connection for the RSS feeds, weather forecast, sending Google Maps locations to the Sat Nav (far better than typing it in through the car!), sending Hotel address from BMW to the Sat Nav, etc. Also the cars SIM is used to automatically ring the emergency services (as well as BMW) when the airbags are deployed and gives them the GPS co-ordinates, car make/model/colour and information on what part of the car took the impact.
The main thing to stress is that you cannot use the cars GSM SIM for phone calls or anything of the like - for that you use your own phone Bluetoothed to the car.
Also you can ring up BMW (from your mobile/payphone/whatever) and ask them to remotely unlock your car. I don't know how it works, but evidently part of the system remains in standby mode even when the cars locked up (I guess that's also how when you turn the car on the Google Maps location is there and waiting for you).
Recently BMW made an iPhone App that enables you to do the remote lock/unlock with a tap of the button (instead of ringing up BMW) and enables you to do the "Send address to car" thing with Google Maps from your iPhone (instead of having to use a computer). So your iPhone uses its data connection to reach BMW, and then BMW send the message (I guess it's a text message in a specific syntax) to the car, and then when the car gets the message it unlocks/locks the doors.
I guess that it could be out-of-service somewhere, but I've never had the car un-able to get a data connection. I've had it in the sticks and my iPhone on O2 hasn't got signal for a voice call via bluetooth (and no I'm not holding it wrong

) but whatever network the cars SIM is on it still had signal!
The iPhone App does a whole load more snazzy stuff with the new F10 5-Series, but Dad's is only an old E60

.