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There are pros and cons with each approach. You can't beat the look and integration of the OEM system (especially the 16:9 unit) but the downside is the cost and major effort required to do a complete retrofit. With an aftermarket system you can usually get it at a lower price point and the nav functionality is frequently a bit better, but the downside is it looks aftermarket (re: not nearly as good), the overall electronic integration isn't nearly as good, and you run the risk of losing the ability to control the OBD computer if you remove the factory stereo unit.
Weighing everything, I think I would go the retrofit route if it were me. But that's probably because of all of the "toys" I have in my nav system (TV, DVD, Bluetooth, IceLink, nav) that I now couldn't live without.
Funny thing is, when I was first looking for an X5 the nav system wasn't even on my "like to have" list, let alone the "must have list". It just happened to be on the vehicle I bought. Now, I couldn't live without it and wouldn't buy another unless it was there.
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