OK bud, if it's the original look you want, and not wanting to spend too much money.......
Then if your head unit looks like this...
Then the wiring/plugs will come out the back like this...
Which is a standard (at the time) BMW connector to ISO via a short length of wire (so that they could fit it into the MGF and others without changing the radio, just different badges on the front)
Subsequently you can fit this adaptor that plugs in the back between the adaptor cable and the CD player, then has a lead that'll plug into the iPhone (or any other device that has a 3.5mm jack point)
Hope that is of help to you, oh yeah and only £28.65!
Dave
EDIT**
To add a bit more info and possible choice for you
The option above will allow you to listen to your music through the CD player and your speaker set up, but you will have to control it via the iPod/iPhone/iPad etc.
This option will allow you to control it via the CD player (to some limited degree)...