Have any of you guys been to Disney California Adventure? There's a ride there...I'm not exactly sure which ride or if it was maybe the car museum there but it explains that the roundel is actually the design of the propeller but the color choice is that of the bavarian flag. It's been like more than like 6 years so i'm not sure if it's still there but that's something i remember from my child hood
here's a link that describes the logo, not sure how legit it is but the picture sure does seem to be legit.
Scroll down to BMW
edit: LOL at VW being derived from the Nazi Swastika