Here is some info I obtained from another bmw board that might provide some info since you have the nav.
E46 Options/Features Compatibility
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I've had many questions regarding the compatibility of the various electronic options and upgrades, and I'm sure that many others have, too. So I thought I'd start a thread, possibly stickied, noting the compatibility of these options with the e46 and each other. Some of this I've learned from my own experience, others I've learned from other threads here. Either way, it would be nice to have most of this info in one place. Feel free to add to this or correct any inaccuracies I may have made. I'm not sure if this is a better post for the 3 series forum or on the audio/electronics forum, so moderators, feel free to move it if more appropriate elsewhere.
Satelite Radio
First, for either XM or Sirius satelite radio, your head unit must be satelite radio ready. All MY 2003 or later non-nav head units are satelite ready. Some MY 2002 may work if they have software version 50 (look here to see how to find out if your '02 has the appropriate software). BMW states that all non-nav 3 series built 9/02 or later are satelite radio ready.
Sirius is available for nav-equipped cars built 9/03 or later, but XM Direct does not work with navigation at this time (they're still working on it). Note that Sirius is not currently available for convertibles equipped with nav AND Assist. An installation kit hasn't yet been released for this configuration, but it should be VERY shortly.
Owners of older non-nav cars may circumvent these restrictions by replacing the head unit with the newer model. Those with older nav-equipped cars would have to replace their old radio (in the trunk)with the newer BM53 unit and upgrade their nav to the newer system (probably not worth it from a cost perspective).
Although the Sirius kit is not officially available for the 3er Touring due to a lack of an approved mounting location, there is no reason that it wouldn't work if wired just like any of the other 3er models (you'll just have to find an alternative method of securing the unit in the rear trunk area).
Many have been getting contrary answers from their dealers, but Sirius and XM Direct are compatible with BMW Assist.
Sirius and XM Direct are also compatible with the CD changer, but you'll have to make sure you order the right parts. For XM Direct, the part number is XM-RDR-D-101 if you have a CD changer, XM-RDR-D-100 if you do not. For Sirius, see Circle BMW's website at
http://www.circlebmw.com/parts/sirius/sirius-e46.htm 
Linear Mode
