Thanks for all your replies...a brief recap:
Initially it was throwing a code indicating "pressure control solenoid A" (a $400 dealer only part on the throttle body). Double checked the fluid levels (Dex III confirmed as Ok for this tranny as oposed to dealership saying only use BMW lifetime fluid at $20/litre). Then it started throwing misfire codes, mis-key codes, cam position sensors etc etc etc. In an effort to aviod the "dealership" I consulted several different tranny "experts" and got answers all over the place. Most concluded that I had to solve the engine misfire codes which they thought would clear up the tranny codes on reset. Only my original BMW tech thought it was in the tranny and the engine was not misfiring.
Finally after clearing the codes on all systems a dozen or so times did a new tranny code come up: "005 Presuure control valve" along with a variety of engine management/misfire codes. This what my BMW guy thought it was all along....a $75 retail part readily available and easily installed on the valve body.
Results: Tranny now shifts like new and ALL codes on all systems are clear. Strangely, this move even cleared my airbag warning light that had been on the car for several months. If I had an auto that was shifting kinda soft, it might be worth trying this repair to see if it restores some of the crispness in shifting...car now seems to shift much better than before this problem arose.