I ran my stock pads on the track until they started disintegrating due to excessive heat; they were white around the edges and chipped/chunked. In addition to doing that, I'm in agreement you probably boiled the brake fluid.
The red BRAKE light is related to the brake sensors; the sensors are designed to trip when the pads get down to a certain thickness (the sensor wears down with the pad and the connection eventually breaks, triggering the light). The sensors also trip however due to heat.
I concur with ashmostro; get the pads replaced and the sensors while you're at it (sensors are cheap). The rears might be OK (the front brakes do most of the work), but double-check. I'd also recommend a brake fluid flush, especially if it's been a while since your last one. Boiling the brake fluid (and just time in general) reduces its effectiveness. Consider going with high-temp brake fluid, if you're going to be driving the car hard. It won't boil as easily.
2011 BMW E92 335i, 6MT, M Sport, Le Mans blue - Michelin PSS, Quaife LSD, JRZ RS Pro, JRZ camber plates, Eibach ERS, full M3 susp, custom toe arms, Powergrid end-links, brake ducting, SS brake lines, UUC SSK, ETS FMIC, ER CP, Perf. Exhaust, work by VAC Motorsports in Philly