TWO DAYS AFTER PURCHASING A 2000 BMW 740IL WITH 45,000 MILES ON IT FROM A FRIEND, I LEFT MY DRIVEWAY AND ACTIVATED THE DRIVER'S SIDE HEATED SEAT. AFTER DRIVING SEVERAL HUNDRED YARDS, I BEGAN TO SMELL SMOKE. I STOPPED THE VEHICLE TO TRY TO DETERMINE THE SOURCE OF THE PROBLEM. MY WIFE WAS FOLLOWING IN ANOTHER VEHICLE AND PULLED ALONG SIDE ME. I ROLLED DOWN THE WINDOW AND WIFE SAID "THERE IS SMOKE COMING OUT OF THE WINDOW!". I TURNED OFF THE SEAT AND OPENED THE DOOR AND LOOKED AT THE SEAT. THERE WAS A BURNT SPOT APPROXIMATELY THE SIZE OF A DIME HIGH ON THE OUTBOARD BOLSTER OF THE DRIVER'S SEAT. I TOUCHED THE SPOT AND IT WAS EXTREMELY HOT TO THE TOUCH. MY ONE AND A HALF YEAR OLD DAUGHTER WAS STRAPPED IN HER CAR SEAT IN THE BACK. BEFORE EXITING THE VEHICLE, I UNLOCKED ALL THE DOORS IN CASE I HAD TO GO AROUND AND PULL HER FROM THE CAR. AFTER TURNING OFF THE SEAT, THE FIRE STOPPED. I HAVE RESEARCHED THIS ISSUE ON SEVERAL BMW E38 WEBSITES AND HAVE FOUND SEVERAL OTHER COMPLAINTS OF THIS OCCURRENCE. ONE INDIVIDUAL SAID THAT A SERVICE BULLETIN HAD BEEN SENT TO BMW DEALERS TO ALERT THEM OF THIS PROBLEM IN SEVERAL LINES OF BMW CARS, INCLUDING SOME NEWER MODELS. FORTUNATELY, I HAD NOT YET UTILIZED THE AUXILIARY CLIMATE CONTROL TIMER FUNCTION THAT ALLOWS THE OWNER TO HAVE THE CAR TURN ON IT'S HEATED SEATS AND STEERING WHEEL AT A PRE-SET TIME BEFORE THE OWNER ENTERS THE CAR. SEEING HOW QUICKLY THE SEAT CAUGHT FIRE, I HAVE NO DOUBT THAT IF THIS FUNCTION HAD BEEN USED, IT WOULD HA