iPod in E39
You will lose the steering wheel control of the radio if you upgrade the head unit.
I bought an $80 adapter from Crutchfield that connects to the CD changer wire in the trunk. You plug the box into the factory wire, reboot the system by pulling the neg off the battery and the radio will select the changer with the MODE button. Next, run a stereo cable through the hole for the ski bag into the cabin from the trunk and you are able to play music from a mini plug. The sound quality is excellent with no ignition squeal.
There are speaker phone boxes that are stand alone for bluetooth.
Crutchfield is helpful to explain what is involved with radio upgrades.