Yes
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you need an ipod touch or iphone :)
All you need to do is opoen your itunes library and uncheck it if that's how you set your iPod. Or you could just delete it from the library
Yes you do. If you had an iPhone, you would be able to do it as long as you had signal.
Yes. You need an account with a credit card, even to download free content.
You need to go to the BMW dealership and buy a USB adapter. This adapter has a USB and AUX input and a ipod adapter. This way you can control the ipod from your stereo and from the wheel.