BMW Entertainment System - overhead how do i add DVD
 

I have OEM VCR player in my system and have never used it. How do I upgrade this to a DVD player?

Should be using RCA outputs - simply swap players.

So just remove VCR, and install DVD player? I am tempted to use and ipod video for video play back through the VCR, and have the remote control the ipod, especially with the explosion of mp4 video

If this is the system that has the DVD player in the cargo area - yes. :)

no, it has the VCR behind the seat with the fold down monitor and the wireless headphones

One and the same - you'll be fine. :)