Hi Andy,
I'm relatively new here and certainly new to the Z3. I bought mine about a month ago so there will be many on here that are much better qualified and will hopefully correct any mistakes I make.
My car, a 2.2 sport has a double vanos unit, ie. it varies the both the inlet and exhaust cam timing to improve engine performance. I've had similar systems on other sports orientated cars from Alfa's through to Jaguars so I guess it's a well tried system.
The problem as I understand with the BMW system, is it relies on a set of internal seals to maintain the internal oil pressure which harden over time, causing the pressure to drop units to misbehave. They also begin to rattle apparently...I guess due to increased tolerances caused by the seal problems but I'm sure someone will correct me if this is wrong.
The issues I have are a slightly stunted performance and a rattle as described above. My car had sat for a long time before I bought it which is a sure way of killing components hence the need for multiple sensor changes and ultimately the problem with the Vanos unit.
If your car is quiet and running well, I'd apply the commons sense theory I learnt from a seasoned engineer as a young apprentice, many years ago....close the bonnet, walk away and just enjoy the bloody thing ;-)
atvb
Jon