In order to open the headlights, 2 screws have to be removed (see pic) along with two gaskets (see link below).
This shows the headlight gaskets that need to be removed (part #s 4 & 5):
Some people bake their headlights to open them, however I followed the advice of some others and simply used a heat gun along with a flat head screw driver to pry the headlight open (see pic). It takes 5-10 minutes to slowly heat up the headlight housings butyl rubber seal and pry the shell apart. The butyl rubber sticks to everything, so take precautions or you will spend a lot of time trying to remove it from yourself, clothes, and anything else it touches.
BMWs currently in the garage: VF570 E46 M3, E46 XI Touring, E83 X3 "M" retrofit
Last edited by chagrin; 09-17-2012 at 03:50 PM.