I have Sat. radio with IDrive in my 330i and it sounds great to me. IMO, it's definitely better than regular radio, however, it's not as good as CD quality, obviously. The only problem I've had is loss of signal in certain spots...don't know if it's lack of a clear sky or other factors but, in lower Fairfield County, CT...there are a fair number of spots where it cuts out for a few secs.
As far as the MP3 audio input, there is a lack of volume and you do have to adjust the player but, really is a minor inconvenience at worst. I just keep the volume of my player up so I don't have to play with the car volume controls too much between different modes.