If you guys have a on board monitor with tv or navigation system then you probably have a genuine retrofit ipod interface kit (retrofit kit No 65 41 0 409 609). I installed this kit in my 05 X5. This kit replaces the cd changer from the trunk with the ipod which now lives in the glove box, so the good news is it should NOT be a hack job, not sure if the X left the factory with these kits but they are available from the dealers and ebay which is were i got mine from. There are different retrofit kits available depending on the spec of your car.

My retrofit kit does not support the iphone 3gs but the ipod works fine,charging it when connected.