While I'm still on this focus, I want to propose an adjustment procedure ASSUMING that DIAGONAL motion (with MOSTLY-directions) is what is actually occurring.
This proposal ASSUMES the answer to
this question is "diagonal":
(1) Inflate
tires properly, tank 1/2 full, typical driver in seat.
(2) Find a wall at least 4' high abutting about 35' of level drivable ground
(3) Obtain two 6mm allen wrenches (each headlight's two adjusters must be turned simultaneously an equal number of turns in the same direction)
(4) Find a small self-standing or clipping light to see under the hood.
(5) On a dark night, park just close enough to the wall to fit your body in between as you string the tape along the wall.
(6) Mark a 10' horizontal line with tape on the wall at the headlight midpoint; the result should look something like this:
----------------------------------------
(7) At each headlight centerpoint, mark a vertical line with tape on the wall to make a plus sign (one for each headlight center point); the result should now look something like this:
--+---------------------------------+--
(8) Back the vehicle until the headlights are 25 feet from the wall and perpendicular to the wall.
(9) Switch the low beam on (both high & low adjust together for each headlight).
(10) Wait about 1 minute as the Xenons do a calibration run which takes about 30 seconds to complete.
(11) Cover one headlight with an opaque blanket or towel so that only one light is being aimed.
(12) Chant "Lateral:lateral, Medial:vertical", three or four times (or until at least the lateral:lateral part sinks in). This is because the lateral (outside) adjuster MOSTLY moves the headlight laterally (i.e., side to side); in actuality, it moves the headlight aim diagonally, but mostly horizontally. Likewise, the medial (inside) adjuster MOSTLY moves the headlight vertically (i.e., up and down); in actuality, it moves the headlight aim diagonally, but mostly vertically.
(13) Using both 6mm allen wrenches in place on one headlight, twist both adjusters an equal number of turns in the same direction such that the brightest area moves diagonally to about
2" below the horizontal reference tape and to
2" to the right of the vertical reference tape (i.e., the plus sign) for each side respectively (the spec is 2.1 inches/52mm +/- 1.3 inches/33mm).
(14) As a doublecheck, switch on the high beams (the respective alignment should remain the same).
The result should look something like this:
--+----------------------------------+--
-----*----------------------------------*
PS: It's confusing to me how BOTH adjusters work in tandem diagonally; but that's what the BMW E39 headlight aiming instructions seem to indicate.