Just called my local dealer (whom I will NOT name, for their own protection - they're REALLY an excellent group, and offer outstanding service).

Anyway, the service dept person (young gal) tries to help me..

me: "Hi, I'm calling about my '01 X5, having trouble with the key"

her: "I'll be happy to help you"

me: "my key will lock/unlock the doors fine; it won't start the engine"

her: "maybe you need to replace the battery"

me: "already did that - -but remember, it opens/closes doors, just won't start the engine"

Her: "oh... the battery is just weak. get a fresh battery."

me "really??"

her: "yes, it is just a little weak.. It takes a stronger battery to power the starter motor than to just unlock the doors. The engine is a lot bigger than the doors."

me: "Are you blonde by any chance?"

Anyway, I chatted with one of their mechanics who happened to know the system pretty well.

According to him, there are two completely separate systems in the key. One is the door lock/unlock transponder. It has a large battery (which can be replaced, but he claims isn't recharged). The second is the engine lockout/security system.

ONLY the engine lockout system is charged in this process. EVEN IF your key were left sitting for a time you could stick it in the ignition, let it sit 30-40 seconds, and it would have recharged enough that the chip would fire up the engine.

I kind of disagree with the theory that the remote door lock/unlock circuit isn't charged, because I've seen it go from NOT working to working on one of my keys, after having driven around the mountains for a few hours with the key in ignition... but maybe it was just recharged by the fresh mountain air, and not the electricity?

At any rate, i'm going to open up the unit again and see if I can find something cracked.. perhaps I dropped the key and cracked something?

I do board-level repairs all the time, so will magnify it and check out...