How to pair iPhone over Bluetooth to a Mercedes c300?

I have an iPhone 3GS and 4 and just recently purchased a Mercedes 300. Trying to get Bluetooth to connect but having a lot of trouble. I activate Bluetooth in the car and it says Bluetooth telephony ready… On either phone I also turn Bluetooth on but it can't find any devices. From time to time "HandsFree" will pop up but if I try to connect it says it is out of range and disappears. I've read that there are iPhone kits they sell to connect? Seems a little weird to me you have to use a kit if both devices have functionality but has anyone ever connected the 2?

Mmm… Weird. Sounds like something is wrong with either your phone or the Merc. I would call the dealer to have them guide you through it. If that doesn't work, try calling your cell provider. I own a E350 coupe, and I had no problem at all.