Mixed results on progman 27.1 fixing the FM switching with factory installed iPod option. If that doesn't work, you'll need your MULF2 module replaced. Was a popular topic on all the BMW forums a month or two ago. Search these and other popular BMW forums for more detail. 3 series and 5 series were recalled for this problem. E70 also has it but was never recalled.

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2007 X5 4.8i: Space grey w/sand beige, sport, premium, technology, cold weather, comfort access, rear climate, iPod, Sirius, running boards