Software update i would treat as last resort. Too expensive.
If you select random does it only play the first 5 songs or will it recognise that there are more and play the other 7 from the album of 12. Does the right hand side steering wheel buttons allow you to scroll through?
Out of curiosity have you tried a different iPod to see if the problem remains?
Another note is about your media management? I have seen some itunes libraries where file formats are pretty random. The BMW manual does not confirm if all audio codecs works but mentions by name AAC, MP3 and Apples losses only. May be worth checking out.
Just to troubleshoot.
Firmware should be 1.4.1 or later for the mini.
You are accessing the albums on the idrive through cdc 3?
Do the songs that are not visible on the idrive work on a pc or mac? Could be interrupted downloads corrupting the files?
wow that enough waffle from me for now.
Just to clarify my earlier email it is 1000 songs maximum.
E92 320d M Sport, titanium silver, auto,
E9X Picture game / 5 MPH / double bhp / The Beatles zebra crossing / Gordon Ramsays restaurant / Michelin star /