We saw a few posts on this subject. We bought a used 2007 3.0si X5 with the rear entertainment option last month. We were so disappointed when the DVD player would not play our kid's DVDs. We would put a DVD in the player and it would start to "act" like it was reading the disc, but then would give an error like: "unable to read disc" or something like that. The solution was single layer DVD movies. Luckily we had a couple DVDs that were single layer. We tried them and viola! They played perfectly. So we proceeded to burn several of our kids DVDs to single layer DVDs. It worked! For reference we used DVD+R writeable DVDs and DVD-cloner 2013 with the default settings. It took about an hour to rip and burn each DVD, also single layer DVDs are roughly 4.7 Gig capacity while dual layer are 8.5 to 8.7 Gig capacity. If you are curious check out Wikipedia.
This is our first BMW, and we absolutely LOVE it!!!!