Parking sensors notify you with a beeping noise how far away you are from a wall or obstruction when you're parking, usually in reverse. Replacing one on a BMW E46 is pretty straight forward but tedious because you have to remove the bumper. So long as you have the proper tools for removing your bumper--a torque wrench and an 8mm socket--you can replace the sensor in an afternoon.
Remove the fasteners inside the rear wheel wells. There are four fasteners on each side, which you can access by pulling off a plastic liner inside the wheel well. It will be dirty, so have a rag and soap near by.
Loosen the bumper cover from the lower quarter panel by pressing down a clip that holds the two together. On pre-2001 models, you'll have to remove one screw in addition to the clip.
Take off the bumper trim by pulling on it.
Remove the two 8mm or Torx bolts that hold the bumper cover to the bumper. Use an 8mm socket or Torx 50 tool on the torque wrench to remove them.
Pull on the bumper, but don't completely loosen it because your parking sensor wires may be connected. If so, disconnect these and lay the bumper on a blanket nearby. Putting the bumper directly on the ground, especially on pavement, will scratch it.
Remove the parts of the old parking sensors: the power supply, display, wires, display panel, and sensors. The sensors should be connected to the bumper with tape. As you remove the old sensors, note their placement so you can place the new sensors in the right spot. Make sure the power supply to the sensors is turned off when you remove it so that you don't get shocked when taking out the wires. The wires will be fed through a hole in the rear of the car that the rear lights' wires are also fed through. Make sure when you remove these wires you do so carefully, so you don't damage the wires for the lights.
Tape the new sensors where the old sensors were on the interior of the bumper. Feed the wires of the sensors through the holes in the car just as the previous wires were fed through, unless you're using a wireless system, in which case there are no wires to be fed to the control panel. If that's the case, make sure the antenna is connected to the bumper according to the manufacturer's instructions. Otherwise, you will need a friend's help to feed the wires through the body of the car, because you have to reposition the bumper. Though the bumper's only about 9.07kg., it's easiest to attach to the car with a friend's help.
Attach the wires of the new system to the power supply in the back of the car. This power supply also powers the rear lights and should be what the previous parking sensor system used. The parking sensor kit should come with wire nuts to tie the new wires to the power supply.
Test the new sensor system according to the manufacturer's instructions.
Reattach the bolts, clips, trim and fasteners that had held the bumper in place.