After reading through all 19 pages of this post and searching the internet to make sure this would work for me, I did it.
Called up BMW and got myself the iPod kit ($300 - normally $375

direct from them but I get a discount for my shop

)
I found it online as well but for about 300 after shipping so I just went with BMW direct for ease.
For reference my car is a 2006 M5
Had factory disc changer, and the single disc did read MP3 CDs
Was just plug and play, no programming needed. iDrive reads it just fine!