If I'm not wrong, that error means the installed ABS unit is from another car (probably a used ABS that you've installed). When the DME reads a different VIN off the ABS, it triggers the DSC light in your instrument cluster but the DSC/ABS function is still working. To get rid of the light/warning message you'll have to re-write your DME's VIN to the used ABS unit via 'ncs expert' so that both VINs match.
Resetting steering angle sensor is easy and can be done with INPA. Enter E46, Chassis, DSC (MK20 or MK60 depends on your setup) from there follow the menus, you'll read the VIN and Miles onthe used DSC and another menu should reset the steering angle sensor. I don't remember exactly where the entry is as I was in your exact position about a year ago and things went smooth so I'm sure you'll find it. Just make sure the wheels are straight and you've already aligned your wheels. If you tilt the steering wheel left or right you can see from INPA the readings off the LWS vary from -tve to +tve.