Well, there's no reason you "need" a subwoofer, and that's been quoted as at least $450 on its own. I seriously doubt you need speaker upgrades at all. (It is vaguely possible, if unlikely, that the speakers run at an odd impedance that a replacement amplifier would not be able to support, but I can't see how even that couldn't be resolved with careful use of the amplifier's gain control.) The only thing that you almost definitely need is an amplifier upgrade, since the built-in amp is expecting different line levels than what the empeg produces. You might be able to get a preamp that "converts" the empeg's output to what the BMW amp expects. In fact, that may be the PAC module he mentions (or not). Certainly the PAC OEM-2 is intended for exactly this purpose.

It sounds to me like he's seriously overselling you. I'm not sure I'd use these people unless he can give you a reason for trying to push a subwoofer and speaker upgrades on you.

He also clearly doesn't understand what the empeg is, as he's suggested their "spec.dock", which is a iPod connector cradle, which won't help with your empeg in any way. (Oh, unless he's suggesting you dump the empeg and get an iPod.)