I've noticed your location is in SoCal, mtech. Just this a.m., i brought my 07 X5 to the dealership (Savage) for the ticking noise in the engine and also informed my SA about the peeling finish in the steering wheel and the deteriorating light knob. The SA didn't give me a call for status until the end of this day (but he forewarned me earlier that my car might be in their garage x 5 days (including weekends) as there would be a lot of work. I hope I won't have problem with the warranty issue like you've been dealing...but I totally agree with you, how can it be a "wear and tear" when you hardly touched the knob as it the headlights are supposed to be in auto mode? Maybe folks at BMWNA would realize that there are similar problems or issues in the vehicles they've been making.

__________________
2007 BMW X5 3.0si Black Sapphire

2002 BMW 325i Titanium Silver