first question what kind of phone is it. Just because your phone is bluetooth doesn't mean it will pair. Some phones just dont. second question is your seatbelt on.. it should be when pairing something i read on this forum
3. did you follow this guide. big bob posted it in the bluetooth thread. I paired my bb 9650..
4. Did bluetooth ever work before you posted? I just found another thread where you said" Anyone else having trouble discovering the Bluetooth with the BMW X5, Suddenly my Bluetooth stopped working, can anyone help me on this?"
If it was working at one time and now its not then the unit probably locked up. You going to have to unplug it and disconnect the battery. let it sit for like 15 to 30 mins.. its in the rear left panel next to the amp.
search in the forum there are detailed steps.

PAIRING PROCEDURE E46/E83/E85/E53
Turn Key off and then to KL-R or KL-15.
1.The vehicle is ready for pairing for the first 2 minutes of key on.

2.If the R/T button on the MFL is pressed, "Activate Phone" appears on the MID or Board Monitor. For the E53 X5 the seatbelt needs to be plugged in and the R/T button pressed on the MFL and "Activate Phone" appears in the Instrument Cluster.

3.During the pairing process, depending on equipment, the indicator lights on MID or Board Monitor display flash.

4.Your mobile phone should now be set to search for BT devices. See the Owner's Manual for your handset.

5.A request to enter a password, PIN, or code appears on the handset display, depending on your model.

6.Enter the 'BLUETOOTH PASSKEY" (supplied with the vehicle literature), using the numerical keys on the handset and confirm the input. Look for a confirmation message on the handset.
7.To conclude the pairing process, turn the key off.

8.Wait approximately 30 seconds before turning the key back on. The phone will now be connected when the key is turned on. It may take several minutes to initially load the phone book stored in the handset depending on the number of entries.

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E53 06 3.0i

wishlist
Comfort Seats
speckdock 2.5

Mods
Air suspension - wip
skid plate replica - in box
OEM sunroof deflector
OEM bluetooth streaming
navi,dsp,tv retrofit - wip
Low prof roof racks
2 directtv satelite tuners
Grom audio usb2
quarter and back window sunshades
2 10"subs- boxes opposite sides/Alp MRP-M850
rear heated seats retrofit
rear footwell lights retrofit
remote window roll up