So I have a 2004 S, and I just got a new Bluetooth Motorola phone. What exactly needs to be done for this whole thing to work in my car?

 

Mini has offered a Bluetooth accessory kit, which I personally found pretty crude. You can search here for details.
A new kit was recently shown over on motoringfile.com ; though avbl only in UK/Europe right now it will almost certainly come to the US. It looks pretty slick but is potentially problematic/expensive to refit. Keep you eyes open for details yet to come.

 

Forget the MINI bluetooth adaptor until the new one gets on this side of the pond. Buy yourself a Bluetooth headset! I'd recommend the HBH-65 from Sony-Ericcson. I've got one and love it.

The description above of the US Bluetooth adaptor is perfect... CRUDE! I can't believe that they tacked that aftermarket controller on a semi-custom mount and call it a dealer option.

 

I have sony ericsson HCB-30 bluetooth car kit to fit into my MINI. It works great and only cost me around $90. You can get the kit from eBay. Sony has new model so you may can get HCB-30 at lower price.

You can get different "how to" instruction from different MINI forum websites.