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Don't know for an X3... hopefully someone will chime in and help you out.
I get DVD in stereo by using a BMW TV module and a HD DICE module and a DVD player I installed under the front seat. When I play the DVD video (on the nav screen), a button on the radio can be pressed to change audio to any audio input (DVD audio via aux, HD Radio, etc). This is a function of TVonNav.
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