Nice car, I have a 2000 323i and have upgrade the system totally from the bussines series system, you can keep the factory radio and upgrade the speakers and factory amp with aftermarket, you wont believe the change, I recomend keeping the factory radio for looks (if u have a cd player or changer) and keep the radio controls on the steering wheel, but if you replace it there is a piece available to keep the factory steering controls, thats what I did for my flip out screen, there is nothing on the stereo system wiring that would affect the vehicle unless they cut other wires so I strongly suggest to go to your local specialty stereo shop for a better system and ask them to explain and show you how they would do it, if you don't have experience on wiring let a pro do it in my case I have all my speakers and amps Orion with custom enclosure sounds incredible and have all the trunk space for my use.
Good luck
P.S. I have upgrade my alarm system with a remote starter viper ... never have any problems and have warranty left.