Yes, it is quite possible, and you should. I had a 1998 740iL with a MKI nav computer. I upgraded to a widescreen and MKIV. To do the MKI to MKIV upgrade, buy this cable: 61.12-6 907 840 - Navigation Connecting Lead Harness for MKIII & MKIV. It replaces the trunk adapter with the plugs you currently have.

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2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input