This is not a new DIY...in fact, I just did this install yesterday and I followed this thread:
The reason why I am posting this is that in my own research for this install, I found a lot of people that wanted to know if the factory iPod/USB adapter and the phone
snap-in adapter can co-exist in the center armrest within a e90/92. The answer is yes, and here's a picture. My ipod fits nicely in the leather pouch under the armrest cover and the phone
adapter simply uses the space that was once occupied by that small tray.