I need to reprogram my engine computer, to factory settings. Is there anyway I can do this, or do I need to take it somewhere?

A 1994 is an OBD I computer. My understanding is that if it has been reprogrammed, someone has replaced the chip in the computer. If the seller did not give you the original chip, you will need to find a computer from an identical (and I mean identical in almost every regard but the paint color) junk yard car.
Go to the websites of the aftermarket performance parts vendors to learn about 'chipping' your car.

If you just mean the computer settings that adjust for local ambient air pressure and driving style, those will adjust themselves over time, or you can disconnect the battery and turn the key to the on position for a few minutes to clear programming back to default settings. If you have your original radio, you will need the radio code after disconnecting the battery.

Rbell1168,
The following is the inherent truth on ALL BMW transmission controllers; They can not be "reprogrammed" or "chipped" they only read pressure from the transmission and tell the transmission when to shift (years 93-99). Next the gear box MIL (malfunction indicator light) only pertains to things of the TCC (torque converter clutch) and should be handled by a reputable shop that specifically deals with transmissions. Next, The M50 BMW ECU can be flashed by some local shops or the dealer, which is the best bet since it IS BMW. There are three companies in the US that actually chip and reflash the software on the -154, -190, and -196 ECUs. this is done by a program that calculates the air/fuel mixture for the fuel and spark advance, if you need a stock ECU for better performance it is best to just go and grab one out of a beater in a junk yard some place then spend $250 and flash it back to stock. It is important that you use just one of the three ECUs that were used that production run. As the others from say a 5 series or a 7 series will not operate your motor correctly.
If you have a 318i you can use a 325i and 325iS, but not a 325e as they have more of an economy set up and will give you drive ability issues, and that is only if you have the 2.7L I6 not the 1.8L I4. Hope this helps and let me know if you need any clarification as this stuff gets confusing the first few times you try to soak it in.

Hi R, The comment stated by my guru friend is in fact correct. There are two different manufactures who produce management systems for you vehicle. It is very important to get the exact replacement as the wiring connections are different. The computers cannot be reprogrammed, as my friend has said they can only be re chipped.with different electronic mapping. Take the original management system and the unit you've purchased and tell the supplier you need the exact replacement. If you already have a direct replacement, then the one supplied is defective and needs to be exchanged.
Regards Johngee10