Just to chime in here. Sorry I don't own a X5, but I do have a M3 and it has a similar-ish NAV system to the X5.
I have the Intravee interface in my car.
Intravee I've being testing it now for around 6 months and its a lovely piece of kit. It interfaces the BMW I-Bus to the Alpine AI-Net Bus. Meaning that you can connect a Alpine S-634 MP3 Changer and/or a Ipod if you purchase the additional Alpine KCA-420i. If you want both the ipod and the S-634 you need to purchase Alpine's KCA-410c
One of the nice features with the interface is that you get new options through the BMW NAV menu system to search through Artists, Songs and Playlists and ofcourse full ID3 Tags are displayed as well. You can even assign certain buttons on the steering wheel or NAV system to do certain things. For example I've assigned the "clock button" to goto the ID3 info screen. Nice short cut !
Screen Menus
Anyway the interface is still in beta. The guy developing it wont release it until he is sure that it works 100% on all supported vehicles both in the USA and Europe. If you are interested you can go along to the website and ask to join the beta testing program.
I should mention also that the interface is also compatible with the in-dash radio units as well.