I retrofitted a full BMW hitch and electrical install (UK kit) to my UK X3 over Easter. This was a lengthy job (UK cars do not come pre-wired for the hitch) but by no means impossible.

The installation includes fitting a new control unit under the rear load space rear cover (the trailer module). This box of tricks wors with the rest of the car to adjust settings whenever a trailer is electrically connected to the X3.

The last task is to get it all coded as a retrofit using the dealer diagnostic system - the trailer module software was updated and the DSC, PDC and light modules were reconfigured to make them aware of the trailer hitch (I believe this is what a retrofit software install does). My dealer did this for 1 hours labour and also checked the install.

It all seems to work well although I haven't yet towed a heavy trailer.
Email me if you want detailed installation instructions etc

David
2006 X3 Sport 2.0D