Reference - E38 front brake pad replacement
I realize that this is a common and simple one, but I thought it might help somebody who is looking to try a little DIY rather than risk getting hammered at the dealer.
I recently changed the front brake pads on a 1999 740il and it went easily. You will need a set of new brake pads and a couple packets of the brake grease. It's also a good idea to get a bottle of BMW spec brake fluid to compensate for any loss during the process. The only tools I used were a 7MM allen wrench, a flat screwdriver, a c clamp, some rope or wire, and a hammer of course.
Chock the rear wheels, jack the car up, and put it on jackstands. Remove the drivers side front wheel and tire exposing the disc and caliper. Inspect the disc for its thickness and surface conditon. By this I mean is the surface of the disc grooved or warped. If it is it may be new disc time too. I've run into issues getting BMW disc rotors turned. That aside, on the upper and lower edges of the inside of the caliper are two plastic caps. Pry these off with your screwdriver. This will allow access to the allen, (or hex), bolts. Remove the bolts and put them somewhere you can find them. You will see a wire retaining clip on the outside of the caliper. Use your screwdriver to pry this off. It may take a little fiddling to do so. Remove the brake lining sensor wire from the caliper with a needle nose plier. This is a fragile item and may not survive requiring its replacement. Theoretically the caliper is free to slide off now. However I found that the judicious application of the hammer was helpful here. Once the caliper is free of the disc use your rope or wire to suspend it from the coil spring. You don't want to let it hang from it's hoses. the brake pads come right out. A little rubbing alcohol to clean the contact area of the caliper is a good idea at this point. Remove the cap to the master cylinder and place a shop towel around it to help with cleanup. Use your old brake pad and place it over the caliper piston to protect it and use your c clamp to press the piston back to a flush position. Apply your new brake grease to the contact areas between the new brake pads and the caliper. With the new brake pads in position return the caliper to the disc and reinstall asnd retaining clip, allen bolts, and the plastic caps. Remount the wheel and tire and repeat the procedure on the passenger side. After you are done there check the fluid level in the master cylinder and replace the cap. After the car is back on the ground fire it up and pump the brake pedal a couple times to check for pressure. I hope this of help to someone.