Stu,
It worked (sort of). Went though all the steps (and everything was exactly like you brilliantly said). Re-booted the MMI and pressed the telephone button and now rather than the usual "No Bluetooth preperation installed", it now says, "No Bluetooth device attached, do you want to search for a bluetooth device now ?"
Wohoo, it seems like the bluetooth unit is active, HOWEVER, we can't seem to pair a phone. When we select "YES" to search for a bluetooth device, despite his iphone been in discoverable mode, the Audi does a search but only for about 5 seconds then says "No bluetooth device found". Also, most of the options in the now visible bluetooth menu are ghosted out and unslectable (which I assume is because we don't have a pairing yet) ?
Have we missed a step out, or is there something esle we need to do. So near yet so far. In anycase, my colleague wants me to pass on massive thanks to you Stu for your time.