have you tried looking at the aux input for the oem headunit? i would suggest that route instead of the fm modulator.

i would think the s50 has better features like being portable and downloading songs. which should mean it has a better interfaces and probably lets you manage it with your pc/laptop.

the bmw unit would be out of sight, looking 100% factory and you will have full steering wheel and headunit control as it was intended. however, you won't be able to take it car to car nor having the downloaded songs and such...

give and take really.. depends on what you are after... more features or factory look full integration?