If you wanted to go with surround, in my opinion, you would be wasting your money trying to integrate that with any of the factory electronics. Your car stereo dealer can show you some much better equipment from Alpine, etc, that can handle surround formats. For true surround you would need a center channel installed somewhere in the dash, another channel of amplification, a source that can play DVD surround formats, and a properly crossed-over sub for LFE. It would be much easier and sound WAY better to do that with aftermarket equipment. Just my 2 cents.
I don't think the 2004 OEM changer played MP3's, BUT I could be wrong. You can easily swap the changer for one that will play MP3's or better yet, get an IPOD device and skip CD's all together.
Try searching the Mobile Electronics forum if you want to dig deeper into the X5's audio system to learn more about MP3/CD capability, DSP modes, etc. This isn't really the best forum for audio discussions.
Good luck and have fun picking up your car
