Originally Posted by SenorFunkyPants
I had my first discussions with Castrol Tech support in 1997 about Castrol SAF-XJ (for use in the noisy LSD of my 911 turbo) and still have my hand written notes which say he is sending me to try: "4 ltrs of SAF XJ full synthetic APi 75-145 GLs for LSD with Friction Modifiers".
I had another conversation with Castrol when people first had their troubles with noisy E46 diffs and IIRC the same SAF-XJ that I had in 1997 was recommended for the E46 M3s.
I guess it could be that BMW and Castrol made arrangements to produce a custom oil for the M3s diff but I would have expected them not to use the same designation of SAF-XJ which serves only to confuse. But it would be best to be sure, so that everyone has the right info.
You are correct about the SAF-XJ oil. The XJ oil is a synthetic oil for limited-slip differentials that has some sort of friction modifiers in it. It has been listed in the BMW parts catalog/technical system as the oil to use in all vehicles with a limited slip differential. It was originally introduced for use in the Z3 roadster. It continues to be the only oil used by BMW dealers when performing a routine differential oil service. This is the same oil that was used in the E46 M3 and E39 M5 when they got their run-in services performed.
This is not, however, the same oil that is used for the repair outlined in Service Information bulletin 33 01 02. It was originally formulated to reduce noise on the E46 M3 in 2002, but has since been approved for use in all ///M cars that experience the grinding problem. Without having the bottle in front of me, I cannot say if they are still calling it SAF-XJ or not. I wouldn't think so, because like you said that would cause confusion. I am 100% sure that it is a different formula than the standard oil. I'm not sure what exactly they did, but it does greatly reduce the clutch noise vs. the SAF-XJ oil.