I don't think it will work. The e46 beside the shape it comes with cd drive and the e53 comes with tape. I assume it will be a conflict when the handshake takes place between the devices. The e53 bordmonitor will most likely look for the cd changer while the e46 will not know what that is. The amp might not recognize the handshake message from the e46 monitor and it will turn off. Isn't the e46 bordmonitor deeper than the e53 one? It might not be enough space for it in the x5.
I might be wrong but I guess if cd was an option for the x5 then BMW would have implemented it in the later e53 models.

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4.8is 2004 imola red
4.8is 2005 Black on Black - DINAN/2 sold
4.4 2004 X5
2003 330xi
2008 328xi - sold
4.4 2000 X5 - sold