I changed mine to Royal Purple Synchromax High Performance Manual Tranny Fluid and I'm enjoying easier shifting. Supposed to keep it cooler and less friction also. Some people claim it's too thin but as I change mine very 20,000 Im not to worried about it. I know I've seen quite a few "M" guys running it for the tranny. I"m staying with the stock fluid for the diff when I change it. Here's a good "DIY" about 3/4 way down page... A great link with some good Mods... Thanks Bill
http://billswebspace.com/bmwmc.htm
Just be careful of stripping the fill nut. Id use a stubby hex from snap on if you can find one or you could have this happen and have to buy some Vise Grips...LOL
http://www.zpost.com/forums/showthread.php?t=356204