iOS 3.0 introduced A2DP (advanced audio distribution profile) stereo bluetooth playback to iPhone but for some reason Apple never added the accompanying AVRCP (audio/video remote control profile) to go with it... until the new iOS 4.1 beta.

Basically, in iOS 3 and iOS 4, you could play and pause music and other audio but you couldn't control things like volume. The buttons on the Bluetooth device simply didn't work. This was a show-stopper for many users who wanted and needed that kind of control -- for example, to use while driving.

Looks like they've got it now.

[MacRumors forums via 9to5Mac]