Welcome to the board. In terms of your questions, BMW does not have touch screen NAV. Unfortunately BMWs NAV is a bit behind in terms of technology, but it gets the job done.

You can indeed retrofit a wide screen NAV to a X5 that has a 4:3 screen. The administrator of this board has done this without any problems. 2003 X5s got the DVD navigation, so 01s and 02s have the non-DVD unit. You can upgrade that as well.

I would highly highly reccomend getting a X5 with NAV. It is going to be a tough find as most do not come with NAV. Otherwise your other option is to retrofit the NAV wiring harness and that means taking your X5 TOTALLY apart (seats out, carpet removed, etc.). A few daring souls have done this, but not me....