Backup of MP3 to USB: File format
It is a copyright protection scheme. The files created by the backup routine are meant only for restoring back to the HDD (and probably keyed to your car in particular). I suppose they are concerned that you might use the DVD drive to rip CDs and then copy them over to a USB stick.
There is also a SIB/bulletin from BMW that prohibits service personnel from doing a back up of the MP3 colleciton for you, in case they were about to erase/replace the HDD. Again, mainly to prevent copyright infringement issues.
So its useful to do a back-up any time you expect the hard drive/CIC to be serviced, in case they nuke the contents for you.