Im doing mine now. Id just replace everything if I were you. Water pump, thermostat, upper and lower rad hoses, coolant temp sensor, expansion tank, filler cap. While you're doing that you may want to check/replace AC and WP/Alternator belts/pulleys.
To bleed (according to what I've read) you turn the key to pos 2, temp to 91, fan on lowest, 3 red dots. You open bleeder screw and fill ET with coolant until it runs out without air bubbles.
Some of the pros here can come and correct me if I'm wrong.
Also, I don't know the deal with non-bmw coolant but most people say to use the BMW stuff. Probably worth the few bucks extra or whatever.