DIY E46 Manual Transmission Flush
 

Decide what you'll use. I went with Redline MTL (Manual Transmission Lubricant) Find more about what I used here

So, get your stuff

http://www.blinkfile.com/1375/Fluids.JPG

Then lift up the car (in my case that involved cleaning up the bay so my tech would let me use his lift :doh)

http://www.blinkfile.com/1376/Lift car up.JPG

Locate the transmission and drain plug

http://www.blinkfile.com/1377/Tranny.JPG

Unscrew the drain plug and drain all the dirty fluid out

http://www.blinkfile.com/1378/Tranny Flushed.JPG

Then, tighten the drain plug up, unscrew the fill plug and use a pump to fill the transmission back up with the new fluids.

http://www.blinkfile.com/1380/Filling tranny 2.JPG

http://www.blinkfile.com/1379/Filling tranny 1.JPG

Once you see it overfilling, you'r done, let the excess drain out, tighten everything back up, and call it a day :D