I bought my son a 318i for university. He found an Ipod adapter that allows you to play your Ipod through your FM radio, chosing a specific station. He only just set it up, there's nothing to wire into the car, just an FM transmitter from the Ipod that the radio picks up. It was only $45 Canadian so cheaper in the States. I know some of you will be interested in this.
I also Ipoded my 2002 330xi so that I can use all the buttons on the steering wheel to run the Ipod. The Ipod will also charge while it is hooked up. I had it wired into the storage box above the cigarette lighter box.