this thread brings back some memories of the e46 M3 days...alot of 00-02" motors on the S54 blew motors due to rod bearing issues(oil pump)...the initial people were blamed for over-rev's and etc but it quickly became apparent there was a inherent flaw...a guy named Jason had a website where people would post their engine failures...believe he had over 120 documented failures....hard to blame on over-rev's when the failures were happening with SMG engines, which in theory, cannot be over rev'd.
There were recalls...I wrote a letter to the editor of Roundel speaking about it in 02' and how I thought it was ridiculous for BMW to blame the customers for these failures.
Shortly there after, there was a recall of the engines and the oil pumps were replaced...they also increased the warranty of these motors to 100K miles...I like to think I helped with this!...
Although the S65 motor seems to have "some" issues, its nothing like it was for the S54 motor....see below to read about this fiasco...read at bottom of page "the sky is falling--part II" if you want to read my post in Roundel Magazine from back in 2002 I believe.
http://www.yoy.com/yoy/auto/m3_failmedia.shtml#