Can someone tell me if you need to buy this software for the bluetooth to work?
No, but it won't interupt the radio or ipod if you're listening to that on your car stereo (like an incoming phone call would). You have to have the stereo on a 'BT audio' setting for it to play through the speakers. Same way if you wanna listen to Pandora via BT.
(I'm assuming you're talking about using BT on your car stereo...)