I may be open to correction but my understanding is that you need the MDI ipod connection add-on (optional extra) to be able to fully control the iPod with the steering wheel and radio controls.
The standard-fit AUX socket is pretty much like a headphones-in jack, which will only allow you play whatever audio you've selected manually on the iPod itself through the radio. Not sure you can control the ipod (play, next/prev, etc) with the steering wheel via AUX.
I may be wrong!