Hi,
lein is right in how to address the problem of the phone cutting off your audio by disabling key tones. (A handy tip on a Nokia is to associate a particular profile with the handsfree that has no tones whatsoever - this eliminates many issues with random keytones interrupting the headunit).
Common sources of frustration with the VE Series I bluetooth are caused by not understanding how it interacts with the headunit. It is actually a lot more basic than it could have been (hence the Series II changes). All that happens is that the audio from your phone (no matter what - key tones, ring, voice etc) are transmitted via bluetooth to the little box behind the glovebox then input to the headunit via a pair of wires. Sensing audio on that input, the headunit will switch to the Voice In audio - cutting off whatever you were listening to. There is no "awareness" by the headunit of what it is piping through and it (the headunit) has no 'data' connection to your phone. In other words, it's a wireless form of simply connecting a pair of wires from your phone's speaker to your car audio inputs. The microphone in your overhead console simply attaches back to the bluetooth module and 'talks' to your phone via bluetooth - completely bypassing the headunit. That's why reducing the volume of the Voice In input can help address echo problems.
Expecting phonebook data, caller ID etc from a Series I vehicle is expecting something that's simply not technically provisioned. All you have is a wireless link to your phone for the purpose of routing speaker *output* from your phone to your headunit's Voice In input and *input* from your microphone back to your phone. That's it. Now, saying that, compared to the G series Falcon, this implementation of bluetooth mobile connectivity was a little light on in terms of features, but that's what you have. The Series II VE has addressed these shortfalls with "proper" integration of the audio features of your phone with the data capabilities (address book, caller ID etc).
In summary, no firmware updates or differing phone models will produce anything other than 'Voice In' on your displays in a Series I VE using the factory fitted options.