I have a small sansa clip and I have used it in 2 other cars that had factory fitted AUX (Non BMW). The sound was very low quality, but that's expected I guess considering the size. I would say the quality was at 50%-60% compared to a CD.
Going by that I wasn't really expecting much improvement and would have jumped for joy if was the same, but my expectations were exceeded... I would say the quality was between 80%-90%. All I really had to do was notch up the volume a bit more than usual and there was hardly much difference compared to CD at the volume I usually have it at (if that makes sense lol). I have the basic speakers and more or less on par with the other two cars I tried my MP3 player in.