So after poking around for months, I finally found a post on another forum that set me in the right direction. I now have a paired Iphone4 with a downloaded phonebook in the car, with fully working caller ID on the car display.
What is required: Iphone, another cell with bluetooth (or PC with bluetooth, but I couldn't get this to work)
Make sure the contact list on the non-Iphone contains the contacts you want
1. pair both phones to the car
2. with the iphone paired, go into phone -> phonebook (downloaded)
3. car will prompt you to download the phonebook
4. select yes (or equivalent)
5. can and phone will disconnect and car will be waiting for the phone to transfer contacts
6. on the non-iphone device, turn on bluetooth (if not already) and initiate contact transfer
7. contacts will transfer and the car associates the contacts with the iphone mac address.
As I mentioned, I tried this with my mac laptop, but was unsuccessful. Used a blackberry the second time and worked the first time.