Well after owning this car for 2+ years, I think I'm sick of the SMG transmission. Just to refresh, I bought a CPO 2004 E46 330ci Convertible with 26K miles with one previous owner, in Jan. 2008 from Crevier BMW in the OC. This car still had a factory warranty (that expired in May 2008) and was also a CPO. I also bought an extended warranty through Autoland to provide additional coverage for the electronics and such, like the Nav, powered convertible top, heated seats, backup sensors, etc. I know most people don't recommend buying an extended warranty, but trust me...the extended warranty from Autoland is one of the best, having used it already on things that the CPO warranty didn't cover. It's already paid for itself and I still have 2+years and about 30K more before it expires. Anyways, here's my story:
Spring 2008 (Shortly after my original reply on this post): The car started experiencing stalling problems at a stop or at slow speeds between 0-15mph (as in if you didn't regulate the clutch and the throttle correctly). The car would stall and completely die (though not as violent as some manual-transmission stalls). Anyways, I would have to shift back to neutral and restart the car. This would occur intermittently whether I'm in manual mode or auto-drive mode (sport or non-sport). By this time I had about 30K+ miles. There didn't seem to be a pattern to it as this would happen whether it was a sunny, rainy, cloudy, or foggy day, or whether the car was cold or warm. I didn't think much of it as it felt more of an annoyance than a real problem as this would only occur once every few months. It finally got worse towards the Fall 2008 where the car would stall pulling away from intersections and driveways, multiple times per day. So I finally brought it in to the dealership where I purchased it in Dec. 2008 with 42K miles on the clock (I like to drive, and I drive a lot). They couldn't replicate the problem but they did end up fixing a faulty DISA valve, lower control arm bushings and brackets on this visit. Go figure. This is visit #1 and everything was covered under CPO warranty. Dealership I took the car to on this visit is Crevier BMW in the OC.
Feb. 2009: Two months after initially bringing it in to resolve the stalling problem, the SMG error (red) light turns on after I start the car one evening while I was away from home (the car had been sitting for several hours). I could not shift out of neutral into drive or reverse. I turn off the car, let it sit for about 5mins, tried again with no luck. It finally worked after the 3rd try (15mins sitting in my car) and was able to get into gear and drive to a friend's house that was *luckily* near a BMW dealership. The next morning I go to the dealership and explain what's going with the car. On this visit, they were able to replicate the problem (stalling and SMG light) and ended up replacing the hydraulic pump, oil, and cycle relay. This is visit #2 for the stalling problem and again, the parts and labor were covered under CPO warranty. I took the car back to Crevier BMW in the OC.
Rest of 2009: I still experienced the intermittent stalling problem.
Nov. 2009: I take it for an unscheduled oil change and the stalling problem. (I like to change my oil every 7500 miles.) Again, they can't replicate the problem so they state they don't see a problem and do nothing. I'm at 60K miles at this point and this is visit #3. Dealership I took it to this time was Beverly Hills BMW in LA.
Dec. 2009: I started hearing a grinding/electric shock noise when I shift into reverse, neutral and gear. This didn't really cause any shifting or driving problems yet but I still had my stalling problem as well, so I wanted to take it in again.
Jan. 07, 2010: I finally take it in for the grinding/electric shock noise issue and stalling problem, to my local BMW dealership. They keep my car for about a week while they tried to replicate and resolve the issue. Sure enough after a week, they can't replicate any of it stating on the invoice, "Gearbox noise heard is normal as compared to another vehicle for mileage accrued." (Which I thought was BS since I'm only at 60K miles at this point.) I get my car back on Jan. 11th, 2010, very frustrated. This is another visit to Beverly Hills BMW in LA, which is visit #4 (visit #2 for this dealer).
Jan. 25th, 2010: The SMG warning (orange) light turns on. The owner's manual states that the warning light has forced the car into "fail-safe" mode, and only certain gears are available to use. This is definitely a MAJOR problem as this light would stay lit or would turned on and off multiple times throughout the day.
Jan. 26th, 2010: Without an appointment, I drive an hour to Crevier BMW, (the dealership where I know they actually fix things) to have the SMG warning light looked at. On the freeway, on my way to the dealership, I tried to pass several cars by downshifting from 6th to 4th and the car shifted into neutral instead of 4th. I ended up revving the engine instead of accelerating. I shifted back into 6th and left it there instead of passing. I thought this was kind of odd. So as I near my exit, I tried to downshift again to pass a semi-truck and sure enough, it shifted into neutral again instead of the correct gear. This was pretty terrifying since I went nowhere and cruised in the semi's blindspot until I shifted back into 6th. At this point, I was pretty pissed since I had to take the car back to the dealer 2 weeks after I just got the car back from another dealer.
Feb. 02, 2010: After a week at the dealer, I get my car back and they found/fixed the problem with the the grinding/electric shock noise which ended up being the clutch slave cylinder. It was leaking severely so they replaced it and everything else associated with it. This fixed the grinding/electric shock noise and hoped this also fixed the stalling problem...I was wrong. This was visit #5 and luckily, the parts and labor were again covered under CPO warranty.
I've spent a significant amount of time and money on warranty deductibles, car rentals, bringing the car to different dealers (4 total) for multiple drivetrain issues (along with other small issues) and researching SMG related issues on multiple websites and from other SMG owners (both M and NON-M owners). There seems to a small number of people that have issues with their SMG transmissions. To this day, I am still experiencing stalling problems with the car. All my previous cars were manuals so with this experience, no more automated-manuals for me...at least until I feel comfortable with them again (DCT or VW/AUdi's DSG anyone?)