This is for the z3 but I figure you guys are so up on this side of things someone might be able to help. At idle (and presumably under load but bit tested) it sounds like sonething is loose and rattling around the engine, Sometimes it's slow loud knocking and others as it is in the video below. Engine is a 2.0 straight 6 twin vanos m52. Swmbo tells me it drives fine still and certainly drove ok last night.

I thought possibly water pump as the bearings are known to go and so thoughtbit might be banging around? All help appreciated as I need this back on the road asap.

http://i1128.photobucket.com/albums/m492/stumac1985/CB239956-5F09-403E-880E-DF5F49B8DB20-2785-000004F3E566E406.mp4

[Edited on 19/2/13 by theduck]

Use a rubber tube as a stethoscope to track it down, other trick to track it down is hold the end of a wooden shafted hammer hard a against the suspect component and put your ear close to the hammer head.

I'm not familiar with the M52 engine, but I've just cured a couple of rattles on my M54 which may be relevant. One was the mechanical tensioner pulley, which I swapped for the later hydraulic version + new belt and pulleys. The other were small heat shields above the exhaust manifolds. These were riveted to something I couldn't easily get to and flappier than a flappy thing, making a right racket at approx 2000 rpm and 4-7k rpm. For these I just screwed a self tapper through them to hold them off the manifolds, they seem pretty study now and the car is much nicer for it.

Is the cam belt alright ? Sounds like it might be delaminating.

Hard to tell from that vid but sounds like it maybe aux' belt related rather than internal. Try removing the belt and start up (briefly). If the noise is gone then it is somewhere there. My favorites would be tentioner pulley or alternator clutch pulley if it has one or even just a lump of stone/glass embeded in the belt (if you're realy lucky).

It's timing chain rather than belt

Aux belt needs changing anyway so will try removing that. Tensioner and water pump are my two main suspects, may price up and just do belt tensioner and pump as need to remove so much to get at it all to do the work.

As BT ^^ says use a piece of rubber hose to your ear to narrow down where it's coming from then my preference is a metal rod or bar on the component to isolate it.
Listening to your recording my first thoughts are alternator bearings, water pump or maybe air-con compressor.
Last one easily checked by having your better half turn the temp up and down so the compressor clutch kicks in and out - variation in the noise should tell you if that's at fault.
HTH.
Cheers, Pewe10