The I-Bus is 1-wire serial (9600 E81) bus that BMW's uses to have equipment such as the CD-Changer, Radio, Interior lights, etc. communicate with each other. As an example, you can use it to have the computer respond to the steering wheel buttons or the driver's door opening. You can use it to write your own message on the car radio or OBC display or intercept the radio buttons for use to control your computer; an MP3 player, etc.
All the info you might want on it including schematics and documentation can be found here:
I built the one in the files section listed as "Improved Simple I-Bus Interface" - The parts at radio shack cost about $5. I made my own PCB for the circuit, and if you're interested in building it, I can sell you a etched and drilled board for $10 -- all you will have to do is solder on the components. The simple circuit is good for reading and some simple writing to the bus, but it does not do contention detection, so I would not recommend it for sending messages on the I-Bus reliably. For read only operation, it works as well as all the other ones. To build the "proper" circuit using the Melexis chip would run you about 30 bucks or so.. plus you'd have to build or buy a PCB and solder some surface mount stuff.. bleh
I am writing some CarPC software to react to I-Bus messages. It'll probably be a couple weeks before it's done, but I'll post about it in the software forums here. The first thing it's going to do is map the steering wheel buttons (vol+, vol-, next track, prev track, R/T and voice) to windows keyboard hotkeys (there are actually standard keycodes for these keys) so that you can adjust the volume or track back and forward in your media player of choice from your steering wheel. It'll also probably have some sort of broadcast functionality where it can notify applications that the headlights have turned on or interior lights have come on, etc. I don't plan on doing any writing to the I-Bus in my setup unless someone figures out how to write to the OBC display in the instrument cluster on the E46.
Hope that clears up some of your questions... Let me know if you have any more specifics. I'm not an expert on I-Bus though, so you'd have to talk to that yahoo group I linked...