The 2-pin connector is audio out for bikes that have a radio. It seems there are now two models of cradle connector, one with audio and one without. However, older bikes without a radio came with the cradle connector with audio and the two pin connector was just capped off and didn't connect to the bike.
As far as the 4-button cradle goes, I have heard this one doesn't allow wonderwheel functionality, but I have no experience. I can tell you the cradle is full of electronics, including a STM32F SOC. So it's not just some passive connector, there is firmware and a CPU doing protocol tranlsations or who knows what.