I have an 02 BMW E46 Sedan (325i) with the business class sound system. In short, this system blows. Underpowered and a lot of blown speakers. I know they royally pissed on us by using uncommon sizes and weird brackets which is why I'm having a dilemma. Am I really going to have to buy the 700 dollar upgrade from Bavarian Sound Werks or has any figured out a way to have a nice sounding system? I would also like to swap the head unit for something with MP3 connect and have this professionally done for my steering wheel controls. Any advice on the speakers though?
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There is an existing faceplate mount kit out there for you to mount standard single-DIN sized head units in the E46. So you have a lot of choices out there for head unit.
Depending if your car came with premium sound (Harman) or not, you may choose to bypass the amp altogether to have your own amp. In this case, you will need to pull new runs of wires obviously. It's not any more complex than on any other car.
As for the speakers, my only issue was there was no bass - even though I had the H/K system. I added my own powered sub (Infinity Basslink II) and threw out the useless Harman sub.
You may need to spend a little time doing research on speakers that would drop-fit into the existing holes, or be creative in modifying/cutting the holes to match more standard sized speakers. A rotary tool will most likely be needed of that's the case.
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