If your E46 was built prior to 09/01... which it WAS since you had the 4x3 display you will need to get an old to new adapter harness to change from the round pin radio to the flat pin radio. As other mention, you will need the BM54 radio Euro (BM53 Radio US/Asia) to have the CD work.

Here is the old to new adapter. It adapts cars with the round pin radio to be able to use the flat pin radio. Benefits with the newest radio are support for aux, TMC in europe, and MP3 ID tag support. US benefits are support for BMW Sirius, Aux, ID3 Tags.

http://www.bimmernav.com/store/catal...-item-159.html