To properly upgrade your software you should visit a BMW dealer and request them to update your Navigation software.
If you would like to risk upgrading the Navigation Computer software yourself, you can follow these instructions at your own risk:
Download your choice of BMW Navigation software from this link: http://www.xoutpost.com/articles/all-bmw/navigation/9483-bmw-navigation-operating-system.html Unzip the contents of this file to a temporary folder using winzip or similar program. If required to use a CDKEY you can download it here. I think the CDKEY is only needed going from V16 to V22 on the MKIII Computers.
Run the clonecd application and use the BROWSE feature on
CloneCD to find the temp folder. ****NOTE: As an alternate to
CloneCD their have been reports of another software that works
just as well. This Software called is Magic ISO, and CDs must
be burned at 2x speed and Mode 2 /XA. The Mode 2 /XA seems to
be the important factor here as they tried all different
speeds from 2x up to 24x at Model, and non of them worked.
Magic ISO www.magiciso.com
We do not know any details about this other software and have
not tried using it, so you are on your own.
After launching the CloneCD software Select the Write from ImageFile button (under cursor above)
Use the BROWSE feature to find the IMAGE.CCD file that you saved in a temporary folder from the zip file
Select the IMAGE.CCD file
Hit the next button to copy the CDROM with your CDR Drive
Make sure and set a SLOW speed on the CDROM write speed. I was able to get mine to read in the Navigation CDReader using a 4x speed, but others have suggested 1x speed. Also use GOOD quality CD media. Hit the OK button let it burn a CD
Should look like this.
Download and print the following important installation instructions.
software update using the instructions above.
How to tell what Navigation computer you currently have.
On the Main screen of your display, choose the "settings" selection. on the top right you will see the Computer version and software version: See image above SW 2-1/81. This means 2 = MKII ; 1 = single display (Not split screen) 81 = Software version 81, or BMW Navigation V 21 CD (or greater)
Thanks to /RS2 From Roadfly for the below details on all of the software
Navigation System SA 609 (MK1, MK2, MK3 and MK4): BMW Navigation V 14 CD 12/1999 1-1/69 (7.7) 2-1/30 BMW Navigation V 15 CD 06/2000 1-1/72 (8.0) 2-1/50 3-1/10 BMW Navigation V 16 CD 08/2000 1-1/72 (8.0) 2-1/60 3-1/20 BMW Navigation V 16.2 CD 12/2000 1-1/72 (8.0) 2-1/60 3-1/21 BMW Navigation V 17 CD 04/2001 1-1/72 (8.0) 2-1/70 3-1/30 BMW Navigation V 17.1 CD 08/2002 1-1/72 (8.0) 2-1/70 3-1/31 BMW Navigation V 18 CD 09/2001 1-1/72 (8.0) 2-1/80 3-1/40 BMW Navigation V 18.2 CD 11/2001 1-1/72 (8.0) 2-1/80 3-1/41 BMW Navigation V 19 CD 03/2002 1-1/72 (8.0) 2-1/80 3-1/50 BMW Navigation V 20 CD 09/2002 1-1/72 (8.0) 2-1/80 3-1/60 BMW Navigation V 20.1 CD 11/2002 1-1/72 (8.0) 2-1/80 3-1/60 4-1/12 BMW Navigation V 21 CD 02/2003 1-1/72 (8.0) 2-1/81 3-1/61 4-1/12 BMW Navigation V 21.1 CD 04/2003 1-1/72 (8.0) 2-1/81 3-1/62 4-1/12 BMW Navigation V 22 CD 08/2003 1-1/72 (8.0) 2-1/81 3-1/63 4-1/20 BMW Navigation V 22.1 CD 11/2003 1-1/72 (8.0) 2-1/81 3-1/63 4-1/20 BMW Navigation V 23 CD 03/2004 1-1/72 (8.0) 2-1/81 3-1/63 4-1/30
* The MK1 Nav has different software versions in the nav computer (8.0) and video-module (7.2)
There is a V17.1 CD with installation improvements and a new software for MK3 without split screen (3-1/31). http://members.roadfly.org/bmw_e46_m3/bulletins/841197.pdf The MK4 units were shipped with 4-1/10 from the factory at the start (from 09/02 to 10/02) but this version had some known bugs and therefore BMW put the text "T20.10" as a remainder to upgrade with the V20.1 CD when available. This 4-1/10 software for MK4 has never been released on any CDs since it was a temporary beta software they had to rush out since all cars from 09/02 would have the new DVD based MK4 unit. So the V20.1 CD will install 4-1/12 and remove the text "T20.10" at the start up screen. The only software version that has this text is the beta version of 4-1/10 that was used at the factory for a short period while finishing the 4-1/12 that was released on the V20.1 CD. http://members.roadfly.org/bmw_e46_m3/bulletins/841102.pdf