I think it's time to add some stuff to our Knowledge base for the E46
Remove the 3 tabs that are holding the air vent in place,
You need to pull on the middle tabs....
Make sure that not the ALL thing comes off, just the middle ones....
If you find this much dirt underneath that vent.. I suggest some cleaning up
Remove the connector port by pulling it towards you.
unlatch the air box all around.
Disconnect and loosen the MAF sensor.
Then simply pull the cover off the air box out.
Here you can see both filters and the gasket that you'll need to put around the air box
Apply the gasket provided with your K&N filter all around the air box cover.
REVERSE the process and put everything back..
Apply the K&N and warning stickers but make sure you clean up the area before applying them, and you'r all done