It allows you to load a flash drive with songs instead of using the rear CD changer, it allows you to use an ipod either by bluetooth or by hardwire (bluetooth module required and Ipod cable required). It allow you to pair a bluetooth phone with your audio system, even if your X is too old to upgrade to a factory bluetooth system.
With the 16gb micro flash drive I can load close to 3000 mp3 songs. If you have a cd you can get 15-20 songs per cd so the 6 cd changer can hold 90 to 120 songs (Older CD changer won't play MP3 format). Compare that with 3000 songs that the flash drive can hold.
If a picture is worth a 1000 words what is a video worth?
Video of the Grom in action:
BMW X5 2006 GROM-USB2 iPod iPhone Bluetooth Android Interface Adapter Usage instructions - YouTube