I have recently purchased the Dension 500 and I have the older CCC nav. You do not need a Dension 500 to be able to playback songs from iPod / iPhone or even have video playback.
I believe, if you have the CIC nav, you need the addtional combox, which should give you the relevant inputs and compatibility to playback videos.
Lucky for you that you have the CIC set... not as big and expensive job as retrofitting it (not that I've done it) but having been in a car today it self with the CIC retrofit and seeing video playback etc.. it looked amazing!
Now: E92 335D
Gone But Not Forgotten: E90 320D Alpine White