Torque pro is still flaky and limited:
Torque Pro is not designed, marketed or claim to support more than basic OBDII. I do not know of any low cost smart phone Apps that support ABS or Airbags at this point in time, there are some medium cost Apps that claim they support ABS and/or Airbags and more, but these are still flaky and limited. There are also some issues with the low cost wireless interfaces where the will not even communicate with anything other than the DME/ECU.
Not sure why everyone wants to cheap out on OBD2 tools? I understand everyone has a budget, but at the end of the day, with shop labor rates close to or over $100 per hour, even a $250 will pay for itself very quickly.
BMW Scanner 1.4.0:
OBDII scanner will only read OBDII codes. You need to get a BMW Scanner 1.4.0.
You can get it to run on Xp system or XP Mode in Windows 7 (Step-by-step ), or vmware XP in windows 7, you just have to figure it out.
Although BMW Scanner 1.4.0 may be an option, it does have its uses, it is a PITA because it is PC based and any PC based product to use in the car can be very difficult to deal with for many reasons.
These are decent tools and also support ABS and SRS/Airbags:
CRP123 can do:
I actually have a CRP123 and it is a decent tool, it supports more advanced live data as well as ABS and Airbag(SRS). There is on tool graphing that can be helpful, however, a smart phone App for Logging will almost always blow any tool, even in the $5k range, out of the water IMHO.
Autel Autolink AL619:
I have not had my hands on the Autel, however, I have a more advanced Autel Scanner and it likely is a big brother to the tool linked. Updates are pretty easy and overall use of dedicated scan tools is much easier than smart phone Apps or even BMW Scanner 1.4.0.
Autolink AL619 is claimed to do OBDII CAN ABS and SRS, it should be more professional on working with ABS and SRS.
Launch Creader CRP129 can do:
If you plan on investing in something more expensive, suggest you also check out the Launch CRP129, it supports electronic parking brakes and a few other things like service indicator resets as I recall.
The most vesicles and low cost set of tools for an E46 is a smart phone App and BMW Scanner 1.4.0, however, if you own other model vehicles or work on them, you will need a scan tool that is not so model specific. It is also much easier to use a dedicated scan tool in the car as there is little to no boot time, it is powered off the car and can easily be taken out on the road or on trips. I DO NOT travel without at least a smart phone App and interface, but I often will take one of my more advanced tools with me.
There may be some other options on the market as well depending on your requirements and budget.