If you have the business radio, there is an aftermarket part that you can have installed ( I had mine done on my 320i ) - The place that did it was Sandton Sound, though they've since moved.. Or closed..
Phone car audio shops and ask if they can do an E46 iPod install, it's a fairly common thing. They took two days to get the part before I could get it installed.
It has full track metadata reading, so you can see what song is playing, control it from the steering wheel and all, change playlists, and even search by artist.
It also has a mode that lets you use the iPod to control the sound instead of using the car's built in interface.
Good luck finding one!