On another note- again, Im not the most acquainted with BMWs, but I have worked in the automotive field for a while. Here's the rundown on fuel, how it affects performance, and what it does to your emissions. The octane a fuel is rated to (87, 89, 91/92) is a measure of the fuel's ability to be compressed without detonation. Detonation is when, at a certain compression over atmospheric pressure with the proper air to fuel ratio, a fuel will burn without direct ignition (spark). An octane rating of 87 prevents detonation up to a compression ratio of around 8.5:1. 89 will last until about 9.1:1, and 92 will go through 10:1. Now, as far as which your engine needs, I would go with the manufacturer's recommendations up to a point. As engines will wear over time, so will their ability to efficiently compress air and fuel. If the rings, valves, or cylinder wall are sufficiently worn, a total lack of compression could occur. I would say that most engines over 125,000 miles have effectively lowered their original ratio by around 1 point. Regular maintenance will extend this, but even so, most engines after 200,000 miles will be fairly worn.
Now, as far as using different fuels in different engines, here's a couple of simple scenarios for you. If one were to use 87 octane fuel in a 9:1 compression ratio engine, the fuel would be compressed beyond its detonation limits, causing the fuel to detonate before the spark had occurred, and before the piston had stopped it's compression stroke. This will cause a pinging sound from the piston trying to further compress the ignited fuel. Over time, say a few hundred or thousand miles depending on the strength of the engine, this will cause engine failure. The same result can be achieved by advancing spark curve (what point the spark fires during the compression stroke, usually between 8* at idle and 25* to 35* at 2500 RPM) beyond it's intended parameters. On the other hand, when a higher octane fuel is used in a lower compression engine (92 octane in a 8:1 engine), it results in unburnt hydrocarbons (fuel) left over from the combustion. Because the high octane fuel is designed not to detonate at lower temperatures, it will not burn completely at a lower compression. When the gases are then exhausted from the engine, these hydrocarbon chains as well as some super-heated nitrogen particles leave through the exhaust of the car, resulting in higher NOx and HC emissions.
Gasoline companies make more money off of the higher octane fuels, although most engines produced do not require them. There for, they market the fuels claiming they have "cleaning" powers. Fuel in itself is a wonderful solvent, but for the period of time it is exposed to engine parts before being burnt in modern engines is negligible. Using 92 instead of 87 as the manufacturer recommends will contribute to particulate buildup as opposed to removing it due to the unburnt parts of the fuel bonding to the exhaust valves.
Some fuels do however burn cleaner and hotter than others- for example, any fuel containing a mix of 10% ethanol will burn hotter and with less particulate exhaust than conventional fossil fuels. However, ethanol is also much harder on rubber and synthetic seals than dino juice, and can lead to premature hose and seal failure. A 10% mix is generally held to be the maximum allowable because of the significant increase of octane resulting from the ethanol.
My suggestions are the following: look up the compression ratio of your engine, it will be in any manufacturer's service manual or many engine fact sheets available online. If the ratio is under 9:1, use 87. If an audible ping is heard, you can either retard the timing (this will result in fewer emissions but less power) or upgrade to 89 octane. For emissions testing, warm up the engine fully (drive it for at least one hour) and be sure that the tank before the testing, regardless of compression ratio, use 87 fuel. As soon as you pass, dump in some octane booster or fill up with the proper octane again. This is cheap insurance against failing, and will not hurt the engine if done only once a year. Hope this helps,
-Berlinettaa- USMC Motor T