I don't see why you wouldn't go for usb
With something like a Dension gateway 500s bt
That would give you usb/ipod music and streaming bluetooth music.
The trouble with cassete cd changers is they all
eventually fail because there mechanical.
I guess if you can get the whole thing done real cheap
it might be worth it. BMW was charging something like 1000 US to put one in .
If you are in London I would get in touch with Makkan00 he has a sticky on one of the UK sub forums here and does stereo stuff and coding.
http://www.e90post.com/forums/showthread.php?t=704363