I just picked up my 2005 X5 yesterday and it does play MP3's

__________________
2011 550xi Carbon Black/Oyster, M-Sport, Premium Package, Technology Package, Electronic Damper Control, Dynamic Drive, Comfort Access, Active Seats, Surround Cameras

2013 X5 5.0 Space Grey/Black, M-Sport, Premium Package, Technology Package, Comfort Access, Surround Cameras