Check out the DIY first as I was too busy turning wrenches to take excellent pictures and write down each and every step: http://forum.E46Fanatics.com/showthread.php?t=317872 You need a socket wrench, extension, 12mm, 16mm, 17mm, and 19mm socket for this. Also, a T50 socket to release belt tension, depending on what year your car is.
Disconnect your battery as the lead from the back of the alternator runs directly to your battery.
Alternator is right next to the engine beneath the intake track. I took off the top half of my cold air intake and the airflow sensor to get access. If you have the stock airbox, that will have to come out too.
After you have removed the belt off the alternator/tensioner(see belt DIY http://www.bmw330ci.net/maintenance/belts.php), remove the tensioner pulley to get to the top alternator bolt.
Top bolt is right below the radiator hose behind tensioner pulley.
The lower bolt just below the top one.
These are hard to see and you will need an extension to get to them.
There is a heavy gauge wire screwed into the back of the alternator that runs to the battery, disconnect that. There is also a wire to unplug. (See Voltage regulator DIY below)
It took me a solid 10 minutes to work the alternator out of the engine. I used a long screwdriver as a pry bar to help then I also sanded down the bolt pass-throughs to try to make it a little easier to reinstall.
This is a great write up about voltage regulators which is typically all you need to replace: http://www.e46fanatics.com/forum/sho…d.php?t=583423