Same or similar here, I jsut bought and '04, and I didn't notice the issue on the test drive, but it became present later. I am out of BMW warranty, but purchased a well-covered third-party warranty.
I am not sure if I have experienced surging, but the transmission is hesitant, like flat when it comes to shifting up, around the 40 mph range.
BMW should pay for this to be fixed. It's a defect.