Just a quick update.
I asked the dealer to be a little more specific as to what parts they were going to replace on the car. My SA told me that the faulty part was the hydraulic valve lifter inside the cylinder head. I did a check at Real OEM and found the following part (it's the only hydraulic part in the drawing, so I am assuming that this must be what they're talking about).
http://www.realoem.com/bmw/showparts...47&hg=11&fg=25
(See part # 7 in the list)
After talking with the service advisor more, I no longer think that oil level has anything at all to do with it.
Tykes22 and jflecha, I would listen carefully to the sounds that are coming out of your engines before I wrote it off to low octane gas. The sound I heard was a) quite noticeable, and b) definitely metallic, though the sound had no resonant component to it (that is it didn't sound like a ping). Just sounded like two hard pieces of metal hitting one another. If the noises sound like this at all, then I would just take the car in. If it is serious, then better to catch it early.
Hope this helps