Heater was on and off intermittently, changes passenger air filter worked and now stopped again!

Next time it stops,wiggle the connector at/on the heater fan motor,chances are that's where the bad connection interrupting fan speed is.

no the pipes should not be cold and wet but if you just have stop using the aircon recently it will do that for a while till all the gas is out of the system so yes its sorta normal

It sounds very much like the heater control door (inside the heater box) is sticking in one position or the other. It's intended to direct air through either the AC's evaporator or the heater core, depending upon whether you want heat or cooling.

Assuming (highly likely) that the control door is vacuum-operated, you may have a vacuum leak anywhere from the engine to the heater box inside the passenger compartment, via the heater control unit.

There is a mode door in those that controls where the air comes out and there is a blend door that controls the temp of the air. If you cant change from hot to cold then the problem is the blend door. You should be able to see it behind the glove box. The glove box door has stoppers on it that you can remove so that it drops out of the way, then you can see the plenum that holds the heater core and the fan. There is also a filter in the plenum for in cabin air filtration. Change the temp settings and see if any of the levers on the plenum move. If they move then the blend door is either loose or broken off inside the plenum.

Found on a '92 Toyota pickup w/V6, a bad/intermittent fuel pump relay.
Had fuel rail pressure so fooled us initially, found by listening to pump run then quit, cycle key and pump would run again then quit, sometimes when trying to start, motor would start and run for a few seconds then quit, or not start at all, this created by intermittent relay operation. Need two people, one at passenger side by tank and other to work ignition switch.
Relay located behind right, passenger kick panel, dealer item I believe about $28.00.
Just another possibility.

To troubleshoot this types of problem,click the link below :----http://howtobyme.blogspot.in/2012/02/heater-blows-only-from-defrost.html
--------Go through the procedure to confirm the issue.

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Engine Overheats and heater blowing cold?

http://howtobyme.blogspot.com/2011/11/engine-overheats-and-heater-blowing.html

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Heat blows cold on drivers side and hot on passenger side?

http://schematicsdiagram.blogspot.com/2011/12/heat-blows-cold-on-drivers-side-and-hot.html

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No heat on car? http://technoanswers.blogspot.in/2012/02/no-heat-on-oldsmobile-silhouette.html

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Heater blows intermittently and temp gauge goes erratic? http://technoanswers.blogspot.com/2012/01/heater-blows-intermittently-and-temp.html------------Heater blows cold? http://schematicsdiagram.blogspot.in/2012/02/heater-blows-cold.html
---------Car heater blowing warm, but not hot air? http://schematicsdiagram.blogspot.com/2011/12/car-heater-blowing-warm-but-not-hot-air.html-------- Heater/AC blower motor not working?

http://technoanswers.blogspot.in/2012/02/heaterac-blower-motor-not-working-on.html

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A/C, heater, defroster fan, not working? http://technoanswers.blogspot.in/2012/02/ac-heater-defroster-fan-not-working.html Heater problem? http://technoanswers.blogspot.in/2012/02/heater-problem-on-isuzu-trooper.html---------

This will help.Thanks.

Under seat blower assy, a possible

I suggest you to bring you car to BMW service center to have proper investigation.

dont belive the 03 modles have a cabin air filter there is a listing all the way to 06 but belive they stopped in 02. if it does remove black cover under passenger dash 3 7 mm bolts pannel pulls down and there will be a removalble cover under that in the heater box if its there

Most likely it does, if you can hit the motor and it will run. I can't say for sure but you might want to chk. to see if you got a heater blower motor resister. There located (if its got one) around the heater motor and it controls blower speeds, might be worth checking out.