In one of the British mags, a buyer's guide on Z4Ms mentioned being aware of the brake calipers seizing, making me wonder if it's more of an issue overseas or we're under-reporting when it happens here.
For the record, BMW replaced the front brakes on my M Coupe last year under warranty. I noticed the car pulling a bit when braking and took it in, where I was told the problem was my aftermarket wheels (OEM CSLs, but whatever). I swapped the originals back on and after my next run down an interstate saw the same symptoms as the OP - the rotor was glowing hot, bit of smoke and strong smell of burnt pad on the driver's side. I drove it straight to BMW so they could see it first-hand. If they could have blamed my aero kit sideskirts I'm sure they would have, but they fixed them under warranty.
I suspect the issue is the scarcity of Z4Ms - dealers see so few that there's no established pattern of problems. At least 2 minutes of each trip is me expaining what a Z4 M Coupe is and I've actually had to show the porter a picture of my car for them to bring it around when finished.
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