BMW auto-box failure due to sealed for life policy on oil changes. Ignore this poor advice, get the oil and filter changed every 60-70,000 miles and it will last indefinitely.
I agree, change the fluids and filter regardless of manufacturer advice. Also if you want a reliable autobox, buy a Ford. Americans know more about making automatics than anyone else.
Last I read, the transmission was designed by ZF but manufactured by GM in France? Not the best of all worlds. Actually, the e36 had a GM designed and manufactured auto that was less trouble and far less expensive to fix. It also had a dip stick and an easily replaced filter and pan. Replacing the fluid on the e46 and newer ones is a royal pain. It's like a manual transmission but with a lot more fluid and a filter.
BMW actually states that the ZF AT is sealed for life and does not require flushing. However, I have always had this done every 40,000 kms or two years as a precaution and yes, they are a pain to do this with as it is a labourious job to carry out.
Best I can advise is what I've did. I've replaced my Steptronic gearbox with the manual 6 speed. I've spent lot of money on the Steptronic. Don't even attempt to fix it. It will break again. Convert it.
BMW used TWO different automatic transmissions on these cars simultaneously. One is the GM 5L40E, and it is indeed made in by a GM factory in France. The other is the ZF 5HP-19, which is made in Germany.
The GM is regarded as the better of the two, as ZF transmissions made during this time have a weak reverse gear drum, which can break under certain circumstances. This results in the loss of reverse gear, and a huge repair bill.
Your VIN will tell you which trans you have.
I read all the horror stories about E46 transmissions AFTER I bought one. Promptly had mine serviced, new oil and filter, at no extra expense over doing one for a Nissan Primera. The trans guy said the "oil for life" policy is compete garbage. At 160,000km my oil was "dirty", but minimal wear was detected on the sump magnets. Crossed fingers here.