You can go straight to any OS distribution CD that is V22 or higher. I recommend you pick any one of them and go with it.

The only reason you might want to update to V17.1 is to keep the Radio + OBC view. With V18 and newer, you get the split screen view, which is very nice, but you lose the Radio + OBC view.

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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