This is a do-able project, particularly if you already have Nav in the car. I may be in the minority, but I really do like the DSP system and the way it integrates with the car's other electronics.

1) You will need to do a little work on the wiring harness. The DSP amp plugs are different from the standard amp plugs, primarily because there are a lot more speakers. So, the main change is to get the three DSP amp plugs and splice them into your existing audio harness.

2) It is more difficult than to install the DSP amp and subwoofer. Also, you do not need to buy the brand new part number that you list. You can purchase a used amp on eBay for hundred$ less. Also, eBay is probably a good place to find the sub too.

3) Yes, the tweeters are different in a DSP system. You could upgrade them to the BMW speakers, or alternatively, you could also do something like a Bavarian Sound Wurks Stage 1 speaker upgrade along with the DSP upgrade.

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2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input