[*] There are 3 Audio options in the Z4. Basic, Hifi and DSP (Carver/Logic7). Basic has 6 speakers & no amp (with 8 visible grills), Hifi has 10 speakers with an optical amp, and DSP is the Carver system with 10 speakers, optical amp and DSP settings you can change. If you have cubby boxes behind the seats you have basic, if you have DSP settings you have the DSP, anytihng else you have the Hifi option. Anything other than the Basic Hifi is incredibly difficult to upgrade. Carver was the original Launch top Hifi named after the company that designed the Speakers, after 2007 it became the Logic7 system, all have Phillips Speakers.
[*] Several members (including myself) have upgraded the Audio, there's a thread with good pictures
here, and another
here.
[*] If you have a black head unit (not dark grey) it should play MP3 CDs, & your changer should too - This was from approx Oct 05 If not you can swap the head unit, and either buy new vents or replace the facia to the grey one.
[*] CD Changer retrofit is tricky as you have to remove lots of the rear centre console, most elect for an ipod install as this is far easier.
[*] If you have NAV you will have TMC, a traffic info alert. This will be green when not using the radio, meaning it's receiving updates. It does this usually from Classic FM.