Dan this is exactly what happens to mine. I lose my pairing with iphone and when I pair up again it's the god awful dalek noise you describe. I've booked mine into the dealer - this will be my 3rd time for this prob in 10 months 
Lucky I'm only 20 mins away from dealer, however I'll be asking them to change it this time.

Let me know how you get on. If it is the iPhone updates causing the lost pairing and subsequent BLAHHH then a new unit won't help will it?
It's great what you learn from this forum 

I FIXED IT 

ok, here is what you need to do, this really applies to iphone users as I believe which each update on the iphone it resets the parameters of the bluetooth and causes interference, since I have already had a new blue&me unit and the same thing has happened again, I don't believe it is a fault with the blue&me and since it is only iPhone users that are reporting the problem it kinda makes me wonder if its the problem of the phone.

so

1) delete user date on car, under settings menu
2) turn off the bluetooth on iphone
3) disconnect battery on car, the black wires have a lever which you just push and it will pull off, the red stays on, leave disconnected for 30 mins. It doesn't affect anything on the car apart from you have to re do the time and date.
4) after 30 mins reconnect battery
5) switch on bluetooth on iphone
6) pair phone from the car menu
7) done, test by phoning a friend.

mine worked perfectly, I had to make 3 calls to be sure 

...hmm, I get it with my 3GS 

Hi Everyone

I have had this problem from new with 3 diffrent phones. I have been back to Glyn Hopkins about 4 times. and thay have told me each time that thay rest the blue and me unit. The last time I watch them and all they did was disconnect the earth from the battery for about 30 seconds and then refit and pair my phone again and it works.

Last week it went again so I did it myself and sure it fixed it again.

Not the best option but it means I dont have to keep going back.

Regards

Phil

Hey Phil, had a chat with the service guys last week, there is a flaw, but people think its the fault of the phone software to the blue and me. you have to ask yourself, have you done anything to the phone, i.e update, reset etc etc if so you could of knocked out the pairing.. and yeah I do the disconnecting the battery now, easy really.. they are hoping a new software update might solve problems.
p.s off topic, bout time we saw you down ACE 

ok back to drawing board, currently have same problem again with mine, haven't updated phone software, so a disconnect the battery and reset..

it is something to do with the iphone for me, but am not sure what triggers it, its like when it loses the bluetooth connection, tries to restablish and then goes off and creates something that isn't right, quick reset and its fine 

I have had 3 b&m sets now, so its not that, prob more the iphone I think.

Mine's gone blaaahhhh again but sadly DanDey's fix hasn't worked this time 
We disconnected and reconnected but the mileage is just flashing, blue and me not working and iPhone not connected. Looks like a dealer fix is required. Luckily they are just up the road from my office.

quick question, you all got iphones?

with the new OS update I haven't had a problem which normally happened.