Thanks for the responses, all good advice. As of now, without actually getting eyes on target, I am planning on new coolant hoses and thermostat. Tomorrow night, I will focus my attention on the coolant line between the heater core and T-stat, since it all seems to have started when I used the heater for the first this year.
I don't mind the work, just hate dropping $700 - $800 every year on parts and consumables. If it weren't for the cooling system, the vehicle would not be so bad.
BTW, I tell all my friends BMWs are owned by two types of people, those who enjoy working on cars, and those who can afford for others to work on their cars. I am the latter.