Saturday I went out to the VPC and talked to the master technician about retrofitting my iDrive pre-march build to be able to use USB. It is technically possible but would be a LOT of work.
He actually took me around a car in the shop and showed me what would be involved. Under the rear trunk flap beyond the compartment is a "brain" for the computer. (Sorry I'm not using his technical terms.) That brain in pre March 07 cars does not have a USB connection that is there for the newer cars. Now that piece can be changed out however in order for it to work you would also need to change the entire wiring harness for the car! After that you would need to reprogram the system to make the car think that it is the post March build of the car and activate that USB port. Now if you damage the optical cable at all during all of this your iDrive/stereo/Nav will not work at all.
So YES it can be done, however at quite a bit of expense.