I have an '02 X5 produced in 11/01 and seem to have crackling or static in most stations on FM, here in ATL. I had an '01 X5 and definitely do not remember that low audio quality. CD changer sounds fabulous, for non-premium audio, compared to FM. The stations are pretty string here in ATL so I am a little bothered as to why this is happening. The dealer looked at it twice and said no issues found. What else is there other than verifying antenna connections and antenna amp (is there one?) and looking at the radio module. Wold swapping out the Radio Module to a new model (ie one that supports an AUX connector) make a difference? I have also seen a post about some mystery part number that seemed to fix somebody's reception problem. Also is you upgrade the radio module in an '02 can you mount the aux adapter inthe front or only the back near the module?
Here's the article from the Radio Articles section:
"Here is a stealth, rarely admitted, (by BMW), fix for common poor AM radio reception. I don't promise it is Your prob., but it fixed mine: part # 65-12-6-916-242...I got it done, only after considerable complaining and tossing out this # at the dlr. The work receipt simply shows this # and doesn't explain whether radio or jes' a "part" was replaced, or what work was actually done. It is now "better" than previous w/o the static and poor signal strength, though not up to most AM radios, imo. But, worth a shot. I haven't put this up on the board very often, but worth a try. GL & BR, md"