I have managed to get my iphone 4s charging and playing music successfully and hope this might help anyone with the same problem.
My new iphone paired successfully and I could make and receive calls but the blue&me adaptor did not seem to work at all. It turned out that it was broken and a new adaptor, while not initially appearing any better, did make the iphone vibrate a little on connection, which the broken one had not.
I had read on a very old alfa forum, I think, that my car system would have been used to my old iphone and that it needed to be forced into recognising a new device. This is done by switching off the new iphone, connecting it with the adaptor and only then turning the car ignition on. This started up my iphone and also started it charging and playing music. Success.
This seems to work reliably, though I do have to switch my iphone off every time I want it to play through the car. rather frustrating but I am so pleased it's working again.
Hope this helps