Thinking about it (it is one of the few things) I have never had a single worry about on the S2 (largely the same car as the S3) or the Coupe. It has done everything as advertised.
There was a problem on the BMW 5 series where the brake sensors which feed the cruise control brains caused problems. Does your anti-lock work correctly ? This might be a clue ?
http://www.bimmerfest.com/forums/showthread.php?t=618388If you have a trapped cable or ground voltage leak around this mechanism it may lead to the issues you describe ?
Any help ?