I bought it at Pace. Since I've read that dealers aren't fixing this under warranty, I took it to Port Chester (Service center for pace and greenwich) hoping that the SA would put in a word. I heard back from him yesterday that he's getting approval to get it repaired. Doesn't help that the service center said that it will most likely need a new bumper. If you have a great relationship at Hassel with someone, I'd appreciate it if you could PM me his/her info. If they could help with this if Pace doesn't help, I'd promise them future purchases.

Well, success. I stopped by the dealership today and got the manager to approve the repair. Taking it in on Wednesday to get the bumper repaired.

my 2007 X5 had this problem. My new 2011 Has a different piece that is just a nice matte plastic with no rubber coating to peel off.
They replaced trim on 2007 under warranty.

i had the steering wheel thing replaced but then later i noticed the window switches have a similar problem. has anyone got them replaced under warantee as well?

had mine replaced this week under warranty, no questions asked.

the steering wheel or the light switch?