Go with the aftermarket system. If you have a good installer, the
interior will be immaculate when they are done. You may have to pay for it, though. Don't go to a electronics-superstore, they may damage the car.
I would recommend upgrading the front speakers and amplification first (the stock and Harmon Kardon amps are not powerful enough for clean, accurate sound) and then move up from there.
I have an entirely custom system in my 325i and it looks EXACTLY the
same, but sounds infinitely better. I have MBQuart 5.25" mid/tweets in the front (which fit, with a little work, into the stock holes) and 6.5" coaxials in the back. Both look perfect -the interior is indistinguishable from stock (which is good also for security) Amps (a/d/s) are in the trunk.
Here's a good guide to upgrade. This is good stuff, and may be more than you want, but it gives you an idea of system architectures:
http://www.adst.com/pages/adspdfs/bmwe46.pdf