Digging up an old thread. In summary, I bought a pre-Sept '05 e90 with iDrive, got the software update and mp3 retrofit in February '06, and now my car has RDS and mp3 capability.
About the CD text issue, I used Nero to burn mp3's into an audio CD, and it worked fine. In fact, the only program I came across that had the CD text option was Nero. iTunes and Windows Media Player did not have the CD text option available when I tried creating audio CD's.
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