I'm reviving this old discussion after I put together my own IAT sensor pot and wiring harness.

I haven't installed it yet but I'll update here as it progresses.
According to my BMW repair manual, the AIT sensor in this car outputs 2.5k ohm at 68f and 830 ohm at 122f. I'm using a 5k ohm pot.
http://farm4.static.flickr.com/3104/...8bf16fe5_o.jpg
The repair manual goes on to say that the ECU uses input from the IAT sensor to retard spark timing as air temperature increases. So in theory at least, colder IAT signal should increase both power and fuel economy... slightly. The beauty of using a pot instead of resistor is that I can check my instant fuel consumption at both extremes of the temperature range and everywhere in between simply by turning a knob.
I mapped out the pot for the 2 known data points. BMW claims that at operating temperature, the intake air temperature should be between 122-158f. Because of the high intake temperature, high compression ratio and lack of knock sensor, BMW requires minimum of 91 octane at all times. My goal of this project is to be able to run the car on 87 octane without compromising fuel economy or performance. The first step was to bodge together my own cold air intake through the inner high beam headlight. Its a sealed forward facing intake that takes advantage of the oncoming air for better throttle response and bit more power. According to some, this kind of intake can also improve fuel economy but I'm not quite sold on that front.

With just the intake, I already have it running on 87 octane without a hitch. Now we'll what happens when I take manual control of the AIT signal.
To be continued.
Justin