To keep it short,
All my testing was comprised of visual inspection and some continuity testing.
I ended up pulling out and visually inspecting almost all fuses (I had no fuse pin-out -> used car)
I believe that fuses related to o2 sensors are located on passenger side in engine compartment and under cabin fresh air intake system, inside ecm box.
I pulled both fuses I found there (believe those to be 40A, inspected them visually and reseated them)
Farther, I looked at all wiring and to the sensor and determined it was not damaged, torn, broken... you get the idea.
A BMW tech, when hearing of the code I had, with certainty said the problem I had was a bad sensor.
I've purchased a replacement Bosh sensor at a local imports place since the price for it was 187 vs. 300 the dealer charges.

Here is the link to Fuse Panel Pin-out: http://www.xoutpost.com/bmw-sav-foru...tml#post942809




Here is what I had to do to replace the o2 sensor (bank 2, sensor 1):

Things to know (terminology and some blah, blah…)
-bank 1 = cylinder 1,2,3,4 or passenger side (black side - connectors are black on all sensors for this side)
-bank 2 = cylinder 5,6,7,8 or driver side (gray side - connectors are gray on all sensors for this side)
-sensor 1 = pre catalyst (catalytic converter) = upstream (in BMW speak) = sensor closest to the engine
-sensor 2 = post catalyst (catalytic converter) = downstream (in BMW speak) = sensor farthest away from the engine

sensor locations
- Bank 1, sensor 1 and sensor 2 are located and visible from under the vehicle on passenger side and from under the passenger seat area (after you remove protective skid plate)
- Bank 2, sensor 1 and 2 are located and visible from under the vehicle on drives side and from under the drive seat area (after you remove protective skid plate)

Another helpful link: BMW Workshop Manuals - X Series E70 X5 4.8i (N62TU) OFFRD Workshop Manual - 3 RA Replacing Left Oxygen Monitor Sensor (N62 _ N62TU)


Work to be performed: (in no way I authorize you to do any of this work. Only a qualified BMW dealer can do this repair and you should let them)

Important: Scolding Hazard! get a Fan and place under the car to cool down the exhaust system before you start any work on it:

Lasko 20 in. 3-Speed Box Fan-3733 at The Home Depot
- put car on ramps
- remove protective skid plate, the last plate located farthest back from the front
(order of skid plates: 1. plastic belly pan/cover; 2. metal oil filter area skid plate; 3. transmission skid plate)
- disconnect o2 sensor you are replacing (you can follow cables from each sensor. Sensor 1 connections are located under passenger seats inside a connector clipped housing)
- remove sensor 2 to allow your arm access to a clip holding cables for sensor 1
- top of engine: disassemble air intake remove two air intakes to air box
- remove top of air box
- remove both lower parts of air box
- remove rain gutter/tray on driver side
- remove center peace connecting drive side rain gutter to passenger side
- remove aluminum cross tie on driver side
- from bellow the vehicle loosen the o2sensor with a long open end wrench (unless you have an o2 wrench)
- find a little boy and place him on top of engine or get thin arms (lol!)
- o2 sensor can be reached from above engine drive side back of engine corner
- replace the sensor
- tighten sensor from bellow
- replace all parts in reverse order
- using an obdII scanner: reset ecm code
- restart the car and make sure everything runs