I don't think I could ever buy a used BMW, even a low-mileage one, with the same confidence I could buy a low mileage Japanese car. After test driving it you're going to have to decide whether the driving experience is worth the likely additional maintenance + repair expense, and budget accordingly.
Also, depending on when the car was originally purchased you may qualify for a BMW PowerTrain Plus warranty (see attached pdf). They offer it if the car is less than 7 years old, so you'll have to check the in service date for the 2006 you're looking at it. I think you'd qualify for 1year/12 months/12,000 miles, but a BMW dealer could confirm that.
I think a manufacturer's warranty is better than a 3rd party warranty the MB dealer is likely to offer. You can check with any BMW dealer for pricing. Different dealers charge different amounts, so you can post in the Ask A Dealer section of these BimmerFest forums to get a competitive quote.