there are several common problems, from most to least common:

1 - Failure of the heater valve assembly

2 - Failure of the solder joints of the two power resistors on the PC Board inside the IHKA Control Module.

3 - Failure of the microswitch inside control head. This is the one on the drivers' side thumb wheel that clicks when you move the wheel to the full cold position.

Some background on how the system works ... by default without any power the heater valves are open. So if you are in Norway in the winter and the system fails, you will have heat and will not freeze to death. How thoughtful.

There are three pins on the heater valves. The middle one should have +12 volts all the time with the key on or engine running. It is not always enough to measure the voltage alone. This signal comes through the microswitch in 3 above. It is possible that a dirty switch could still show 12 volts with no current flow under load. Better to measure the current draw, should be around 2-3 amps if I recall correctly.

You can also check the continuity of the switch, remove the control panel. There is a small 2 pin connector on the back. There should be close to zero ohms in all but the hottest setting. Full heat is achieved by removing the +12 volts from the heater valves.

The ground signal(s) to close the heater valves comes through the two resistors (40 ohms or so if I remember correctly) in the IHKA control unit. Due to the high current and related heat, the solder joints fail. Many times resoldering these connections will solve the problem. However, I have had some where I've had to replace the control units.

To test the heater valves, you can try (at your own risk all usual disclaimers apply) removing the connector and jumping +12v to the middle pin, and grounding the other two pins with a jumper. (might want to check the resistance first, if either of the solenoids is shorted this is not a good idea. Resistance should be +/- 13 ohms or so).

If the heater valves are working ok, then doing this should shut the heat off.

If you want to clean them, look at these pics I posted
http://www.bimmerboard.com/forums/posts/111837/