hi chylee11, I'm not using the head unit anymore since early this year after the carputer project, read about it here
http://www.bmwclubmalaysia.com/forums/showthread.php?39713-DIY-My-E46-carputer-project . But anyhow, the carputer is using the same IC that is used in this project as the amplifier and it is working great. The factory front speakers were also swapped to aftermarket one.
If you're planning to stick to oem radio and not wanting overpowered amp then this upgrade is higly recommended. From the datasheet, only 2200uF capacitor is necessary, but I observed the LCD backlight to dim with bass pumping thus the bigger capacitor to ballast the current surge, it wouldn't hurt putting a larger capacitor for the amp. You should see the carputer project where I have multitude of giant cap, maybe my fetish. I assume you are familiar with electronics?