I use a Nokia bluetooth car kit CK-7W which I picked up from Nokia's show room in Church Street in Bangalore. Deatils of CK-7W are given in
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The kit needs professional installation - in my case, TAFE (the dealers for Skoda) installed it for me and did a very neat job.
The kit comes with an external mic, that is mounted on the driver side A-pillar.
The remote control button (which can be used to connect / disconnect calls as well as increase / decrease volume) is mounted between the steering wheel and the dashbord (just below the speedometer).
The external speaker is mounted below the dashboard.
The car kit - phone pairing is a one time simple affair, after which the car kit pairs with the phone whenever it comes into range.
When a call comes in, the external speaker gives a "ring" tone, the sound system mutes, and the sound system display shows "Phone".
One picks up the call by pressing the remote control button.
The conversation can be heard on the external speaker and the volume turned up / down with the remote control button.
Once the call is over, one can disconnect by pressing the remote control button.
The car kit supports voice-dialling and does a fairly decent job of it (I beleive this feature also needs support from the hand set and so the performance of the voice dialing feature is dependent on the handset. I use a Nokia 6021 and am very happy with the voice dialing.
Hope that helps.