While trying to disconnect my coolant temperature switch trying to test my fan I noticed that soon after removing the connecting plug coolant started to ooze out from around the switch. It seems like the slight movements to dislodge the connector from the switch damaged the o-ring that was probably almost worn out. A poor designed setup in my oppinion that is a weak point in the cooling system. BMW sells the switch for around R330 but if yours is working you can just replace the o-ring for a few bucks which is what I did. Found this cool diy which explains how to do this. http://www.bimmerfest.com/forums/showthread.php?t=385920
Method I used to test the fan:
If you have a two pin switch like mine disconnecting the connector and bridging it with a paper clip should turn the fan on immediately. Turning on the aircon will also turn the fan on. If you start the car and the coolant temp switch is disconnected the fan should run continuously. The fan also conducts a self test by turning on and off for a short while after starting. I dont think this will apply to all e46 318i's. Mine is a 2004 automatic with an electric fan.
Method I used to test the fan:
If you have a two pin switch like mine disconnecting the connector and bridging it with a paper clip should turn the fan on immediately. Turning on the aircon will also turn the fan on. If you start the car and the coolant temp switch is disconnected the fan should run continuously. The fan also conducts a self test by turning on and off for a short while after starting. I dont think this will apply to all e46 318i's. Mine is a 2004 automatic with an electric fan.