Apparently, the 4.4ii V8 has water cooled alternator:
http://www.realoem.com/bmw/showparts...81&hg=12&fg=20

This reminds me that I need to change battery on my X5. Good to hear that OP got his problem solved.

BMW is kinda finicky, my 535i had one incident of trans fail-save induced by low voltage. (yep my 535i was only 2 weeks, went to vacation right after delivery for 1 week then fail-save engine reduce power, never again).
You'd think transmission is not related to alternator.