I have a 2006 Changer in my 2003 X5 and burn my discs with mp3 tracks in a folder for each album. These play fine with no problems.

\Album1\Track 1
\Album1\Track 2
\Album1\Track 3
\Album1\etc....
\Album2\Track 1
\Album2\Track 2

I haven't tried having the folder path any deeper than is shown above.

Hope this helps.

Trikster