Well, I thought things were going fairly well, but I must have done something wrong. Not being able to find an answer to the 3 vs. 4 pin question, I went down to my local dealer. While they wouldn't sell me the $89 pin-extraction tool (they said they weren't allowed to sell bmw tools), they did let me borrow one.
A service technician told me that brown and red/green were power & ground and were required. This made sense, since brown and red/green were both on the iPod interface side as well. For the 3rd wire, he said I should go with pin 7, the white/red wire, because it was the IBUS wire and would certainly be required. I was a bit uncomfortable with this, since the wire on the interface side was white and purple. On the radio side, white/purple was pin 5 which he claimed was an un-needed wire. Looking at the closeups of madrussian's connector, the white/purple wire was in the 4th slot which is not used on the second gen interface. So, I went with the guys suggestion and left pin 5 connected to the radio and just hot-wired pins 7, 9 and 15 onto the iPod interface.
After getting everything tucked back inside, I reconnected the battery and started the car. The radio is completely dead. No power, nothing. The interface doesn't do anything either. The iPod just sits there and no lights come on for the radio. I've still got the radio loose, so I can pop it back out and mess around. But, I don't know where to start. And, without a pin extractor, I can't easily swap wires around either. I'm afraid I may need the dealer to bail me out on this one. Any suggestions why the radio would be dead after this installation?