Shawn,
Sorry, been busy with exams, etc. First of all, here's the link where I learned how to do this:
http://www.garageboy.com/e28/headrest.html
The E34 is the same way, and I'm certain the E32 is, too. There are two philips screws on either side of the bottom of the driver's and passenger's seatbacks. After you take these out, you'll need to push UP on the seatback portion because there are two flexible metal clips that hold the bottom of the seatback piece to the backrest frame. After you get the bottom out, just pull down and take the seatback panel out of the car.
You should see the motor--a small flat-finish bare metal cylinder attached to the seatframe under the headrest, with a thick cable going in one end. You want to get this cable out of the motor. It just pulls out, but only after you've removed at least one of the two bolts that secures the motor to the seatframe. YOU DO NOT NEED TO OPEN UP THE MOTOR or anything. Just pull out the cable once you get it loose from the seatback frame.
Then just take your 1/4" or so piece of metal coathanger (metal conductivity has nothing to do with it--just that a piece of a metal coathanger is about the right size) and simply drop it in the hole you pulled the cable out of. Stick the cable back in, bolt the motor back in place and test. Should work. Put the seatback back on, sliding the top part in first and then reaching under the bottom to bend the metal clips over the edge of the seat frame. That's it. I've perfomed this in both my BMW's and the headrests continued working as long as I had the cars (so far in my 535i).
I've never gone to a BMW dealer to complain and see what solution THEY recommend, but it would be interesting.
Btw, the picture of your 735iL by your posts is very nice. I need to update my pic, but the one I have there now is actually of my car sitting in front of a motel in Louiseville, Quebec (well north of Montreal). I live in Maryland, so that picture is kind of unique to me.
Also, how does your new car stack up against the Honda Civic you had? Best wishes.