I am in almost the same exact boat as you. Good with PC's, ok with wiring, crappy with custom work for mobile audio stuff, oh and I have an e46 and my main motivation is no decent iPod adapter (BMW's adapter sucks.)
I will be using a blitzsafe adapter (www.blitzsafe.com) for the aux in, and you are correct, it just plays whatever is being fed to it, no changer emulation required.
Check out this guys Bimmer install for how your monitor mount will look, he has mounted it pretty much how you've mentioned.
Perhaps we can help each other along the way, I am also about to ordered parts. I'll try to post as much as I can and I hope you do the same.