Apologies, I missed your initial reply. I'm scratching my head too I'm afraid. If you haven't, have a quick look at this thread on Buetooth audio.
I'm sure you have already, but just in case, try changing the PIN to 0000, getting latest iPhone software, "forgetting the device" and re-adding. Do all this when not connected or in cradle.
The cradle is an expensive car charger without an aerial in my case as it makes no difference at all to the signal! I like it though because it does free up the USB socket, means no cable flapping around and it's somewhere to hold the phone. And I'll get the aerial checked.