E46 Business CD Aux Input / Recoding required?

[doyleeoin]

So what I was thinking was I'd need to mount this somewhere (e.g. in the compartment under the climate control) and could then plug my device into it with a short male-male Aux cable.

This is exactly the way I have it in mine.

When you say you need to remove the aircon and gearknob trim, is that only if you are running the cable down to the ashtray or cupholders? If I'm installing it in the little compartment under the aircon I assume I have to remove the aircon unit itself, but not any other trim?

You won't have to remove the trim around the gear stick if you're putting it in under the aircon controls.