What does CD-ready mean?

"CD Ready" would mean that the radio unit is capable of accepting and controlling a CD player, most notably a changer as you suspect, like one you would mount in the glove box, console or trunk. There should be an available input on the radio, but whether or not you can get something other than an original BMW unit to work with it is a good question. I recommend consulting an audio expert, such as Crutchfield.com or similar who may be able to tell you more.