I went with Desion USA's iceLink PLUS option (www.densionusa.com
), as my 2000 328 cannot use the ipodyourbmw option. Here's a pic of my setup (older pic, does not show the title of the song/artist name):
With any setup I think you'd have to have 5 playlists set up, in order to access them quickly, using the 1-5 buttons on your headunit. "6" is reserved for ipod/icelink setup. I have the steering wheel controls and it's the most awesome thing. But you can control the volume, previous/next song from the headunit also. Now that they are working on the diplay of the ID3 tag, it's even better. So far they have a beta/working version which displays these, but not scrolling - they are working on that. It's great to glance at the headunit and see what's playing.
What I did with mine is plug the harness in the rear of the headunit and ran the cable through the glove compartment, then out to the cradle. I like this setup. You can just leave it in the glove compartment, if you want, or purchase a Euro tray and replace your cupholders. This setup would work well for you, since your car is a lease, as when it's time to turn it in, you just take the icelink out. Also, the icelink works with any E46s, so if you purchase another one, it should be fine. I guess that as long as the rear of the headunit is not different, it should transfer to a different model. Dunno for sure.
Yes, you can still acess the iPod. With iceLink, the display only works when you acess the iPod via the headunit controls (due to iPod design). But, you can swich to iPod mode and then you can control the iPod just like you normally would. However, in this mode, the only thing you can control from the headunit is volume, and not previous/next songs.
I hope this makes sense and I hope it helps. E-mail me if you have any more questions.