Worbit,
I do not post lot, but I lurk around in the shadows to all the greatness in this board. I have a X3 Racing SRI and have had it for almost 1 year and half. I am using the filter on it as the filter material looks similiar to K&N that I have seen. The only difference is it does not take air in from the front because you can just unscrew the top and take the filter out for cleaning. I have bought and recommend the AEM bypass value. With the right size bypass and cutting of the silicon coupler that goes to the firewall angle pipe and MAP sensor I was able to get a tight fit and not cutting of the metal tube. Understand I do have a rubber angluar piece that connects the SRI to the throttle body. Make sure to put the angluar piece the right way. Also I used the include "L" brace to mount the thing with two tubes to the throttle body's C clamp. Runs great, improves Gas mileage a tiny bit, and sounds wonderful. It was like the car was meant to have the SRI. I have also had comments on how it changes how the car goes, "It's easy to go to fast and the engine does not require to much effort on the Highway" (Mother-in-law, not car person). As for legality in CA. I heard that all they do is really check to make sure it's got the sticker on it. The Tube is physically the same as the INJEN one except color and sticker. If your concerned, get the sticker. If you are paranoid, paint it to match the INJEN. But as other have said, it's a freaking metal tube with a filter! Do you believe it's worth $200+? I am not saying always go cheap (that's bad). But in this case, go for it!
Oh before I go, lil tip. Treat the MAP like it's a bomb and let NOTHING get on it. Also pay attention to the arrow and how it's facing on the MAP. If you do all this, you should be golden.
That is all from you neighorhood Magus
-Magus