- Remove the alternator. - Open it up - Brushes: use Home Depot Bosch Power Tool brushes about $9-10/set - Bearings x 2: find a match. SKF is a good brand. - You may want change the pulley too. This post has alot of resources for Alternator Rebuild: http://bimmer.
roadfly.com/bmw/forums/e39/9347757-1 .html