sounds more plausible to me but Susan is the specialist here!

Could this be corner lighting or dynamic corner lighting?
I have found some references to the above which may be of some use. (but of course I could be totally wrong!!)

Winter pack in conjunction with gas discharge (Bi-Xenon) headlights ... Including dynamic corner lighting, automatic height adjustment and headlight washers ...
www.volkswagen.co.uk/assets/pdf/range_pricelist.pdf

In the dynamic cornering light system, the headlights follow the curve of the ... The new Bi-Xenon headlights with cornering lights are now available as an ...
http://media.vw.com/article_display.cfm?article_id=9589

Dynamic range control continuously and automatically maintains the correct settings of bi-xenon headlights. The control system handles static changes (load ...
www.audiusa.com/audi/us/en2/tools/glossary/safety/dynamic_h...

Good luck!

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Note added at 5 hrs (2007-01-30 12:54:06 GMT)
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Got some extra information which appears to back up the above:
A BMW doc in French gives
En association avec les projecteurs au xénon optionnels, la nouvelle BMW Série 1 est dotée d’une fonction d’éclairage diurne réalisée au moyen des anneaux Corona des doubles phares ronds. En outre, la BMW Série 1 peut être dotée de projecteurs directionnels auto-adaptatifs. Unique sur ce segment, l’éclairage d’intersection qui, à des vitesses inférieures à 40 km/h, modifie la direction de l’éclairage en fonction de l’angle de braquage et, de cette manière, éclaire la chaussée dans la direction visée de la même manière que les projecteurs directionnels adaptatifs.
from http://www.xelopolis.com/Xdossiers/dossier_1171_nouvelles bm...

and a different BMW doc in English
In combination with the available xenon headlights, the new BMW 5 Series comes with a daytime running light function (selectable via Vehicle memory System) using the corona rings in the dual round headlights. The headlights include Adaptive Headlight technology, illuminating the road ahead following the curves taken by the driver. In this case, the headlights swivel in accordance with the position of the steering wheel, the yaw rate of the car, and its road speed. In addition, the Cornering Light function adjusts the direction of the headlights when turning corners at less than 25 mph.
Ref http://www.automotoportal.com/article/the-2008-bmw-5-series-...

Also google with "cornering light system" + xenon

Hope this helps.