there have been times when my remote lost it's memory and i couldn't use the buttons.

This is not an altogether uncommon problem with some new BMWs. The X5's key operates at 315MHz--localized transmissions around this frequency (actually not a very common communications frequency, but it is used by the military...) could cause interference. There are some SIBs out on this issue but I don't know that they would address problems resulting from localized radio interference. I know that other newer BMWs have this same problem in the same location. My E36 has never had any interference anywhere--I'm not sure what its frequency is.

yup every time it happened was in NYC and i thought i was loosing my mind almost scared the hell out of me then i would get out of the city and voila it works so far 2ce it happened not sure but come to think of it it wasnt too far from empire state building

I have yet to have this problem on my X5 (knock on wood), but have you tried holding the up to your chin to get better "reception"? It looks weird, but for some reason, a car remote works better. I used to do that with an aftermarket remote I had for my Nissan and I would be able to arm/disarm the alarm from 200 ft away whereas I would have to be about 50 or so feet away without it at my chin. It worked with my fiancee's 325i when for some reason she couldn't unlock her car using the remote, but then I told her to hold it up to her chin and it worked. I guess our head amplifies the frequency of the remote.

can you just pull the cover out if you need to access the keyhole again?

that remote to your chin is true, it worked on my acura, on my bonneville and on my diamante. my friends think im insane but its true

It is the corollary of the "my fillings are acting like a radio" thing.

Aside from apperance, it makes no sense to slap the cover over a lock cylinder. This is a theft deterent and you should remove the door panel (15 minutes) and lock if you do this mod.