Ghostie,
That's ICEMan's ride, ain't it ? Superb system from what I hear. But looking at the line up of Alpine/SEAS Ref by Lotus/Orion and etc, that'd already a very good platform to start with. I'm shopping for a pair of SEAS Reference or Morel Elate myself ...
Bimmer_Man, options are limited only by your budget but I wud ask that you do some homework before you walk into ANY car audio shops here. While not all of them are out to fleece unsuspecting customers, it wud be a lot easier once you decided on what really you want. Here's what I wud look at if I was in your shoes .... again, this is just my personal view ..
What you want - a system that produces good clean bass and treble sound, clarity is important. No distortion when the vol up. I listen to all kind of music i.e. r&b, house, ragga, top 40.
You'd like to continue the original BMW HU and no plans to add a sub. Current set up with stock speakers - 2 tweets and mids up front, a pair of co-ax in the rear parcel. No major surgery to the stock front locations.
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Ideally, the heart of a system is the HU itself but we all know the limitation and less than ideal expansion capabilities of the stock HU. Considering the fact you want to add EQs and x-overs later, I wud seriously look into getting an aftermarket HU that comes with all these built in. Ironically, for the cost of a quality x-overs and 15-band EQ, you could just add some a couple hundred bucks and grab a HU that comes with these features and hi-volt pre-outs for adding amplifiers. There's no way anyone could extract the maximum potential of a system without a good HU and without the help of quality cross-overs, time-allignment and EQ given the harsh acoustic conditions / characteristics of our car cabins.
Speakers form an important part of the food-chain since this is where the final results come from. It wud be good not to skimp here ... no need to blow a few thousands but just go with one that fits you wallet and ears. The e46 front location does accept 6 inch unit without much mods but you need to make sure that they have slim driver magnets. Cutting and fabricating is only needed with comps like Dynaudio, MBQ and some Morels that have huge rear magnets and cavity. Or, get something smaller like a 5.25 inchers (stock size) from any reputable brand like Alpine, DLS, Eton, MB Quart, Focal, A/D/S - simple drop in and cover job. A word of coution - please bring some CDs of yours when you go audition speakers as our personal taste varies from one person to another. Some prefer bright and upfront type of sound while you may prefer a more laidback and mellow type of presentation. Again, let you ears be the judge here and do not be led by marketing ploy and competition track records that some shops will hype on.
You mentioned that you want good clean bass and here is another dilemma in that respect. Component speakers - regardless of their size can only reproduce limited low frequencies given the law physics. Most will only go as low as 80Hz or even higher in real world usage hence you will notice the lack of clean deep bass almost immediately. Your solution will be to consider a pair of 8 or 10 inch subs mounted free-air onto the rear parcel shelf ( some strengthening required ) while freeing up your boot space. Another option is a bass tube that wud probably take up minimal boot space. Once your hear the real low note extension coming from these babies, you'll never be able to listen to another system without a sub without missing that something.
Amplifiers are definitely necessary as the power output from the HU be it stock or aftermarket is not really enough to derive the maximum sound quality from good speakers. You may need a 4 channel to power your front and rear speakers and maybe another 2 channel if you opt for a sub or tube. Look out for real world power output ... in RMS and not the usual PMPO crap of 1000W. Remember, power does not come cheap so please do not fall for the usual marketing bull. Ideally, any amp that has an output of 50W RMS per channel or more will be just ideal. Again, try to stick to reputable brands as even their entry level stuffs will blow all those unknown brands which may look tempting at the beginning due to their low prices and sky-high power ratings.
And yes, once you've figured out all else, do set aside some cash for the install itself with provisions made for wiring, cables, fuses and etc. Ideally, a 10% of the total budget for the system is the rule of thumb but if you have a fetish for high end cables and wires from the likes of Audio Quest, Monster, MIT, Nordust and Stinger ... spend away

k: I have heard very good thing about ACP and KK Lau but again, shop around until you find an installer who would understand your needs, listening taste and work to provide you a solution within that budget/taste.
BTW, if you are available during the 12 Feb - why not join us for our 1st ICE TT in the morning ? You'll be able to sample some nice tunes and view a few good systems while getting an idea of what you could do with your budget. Details of the TT are found in the Members Meet-Up section ... do join us and you can catch up with all the Resident ICE freaks here ...
Cheers,