Does iPhone 4 work with Bluetooth Headphones/Headsets that have Back/Next/Answer? I am considering purchasing something like Sennheiser MM450 Bluetooth Headphones but I'd like to get some input on whether the Back/Next/Play/Pause/Answer buttons work as expected with iPhone 4?

I've seen some old reviews that said not, but nothing about iPhone 4 / iOS 4.x..
Yes. The iPhone 4 has Bluetooth 2.1 + EDR wireless technology meaning it supports stereo audio and controls. Personally I have these and they have answer/volume +/-/ skip/back/play/pause buttons that all work with iPhone 4.