Yes, the RNS-510 (if fitted with the MDI unit in the armrest) allows FULL integration of the ipod to the unit. All track and artist names are displayed, as well as being able to search on playlists, artists, albums, songs etc.
Also, the RNS has a 30gb internal HDD fitted. About 10gb is reserved for the navigation maps, but the rest (about 20gb) is avaialble for music storage. Again, full track names, searches etc. AND the RNS also has an SD card slot for even more music and a DVD drive that will not only play Video DVD's directly, but can also read mp3 DVD's as well. Trust me, you will never run out of music options with the RNS.
Also, as the maps are now stored on the HDD, the screen refresh is MUCH quicker and now gives you the option of 3D mapping as well as the standard 2D (the only one available with the MFD2).
As far a bluetooth goes, then yes, there are now factory versions (mainly using Skoda hardware) that allow fulli ntegration of the phone to the car, including transfer of contacts, last calls, missed calls etc. It's about a £350-£400 option though.
I still have my parrot CK3000 Evo fitted (as I don't really need all the bells and whistles for thephone) and it works perfectly with my Iphone and the RNS.
Finally (yes there's more)... depending on which RNS you go for (i.e a later revision model) and depending how old your car is, there are also options of full voice control of the RNS, and an add on rear view camera that pops out of the boot mounted VW badge (very neat and cool).
As you can see, the RNS really is light years ahead of the MFD2 in every way.