 Update
OK, got the news from the alternator repair shop, brushes were toast. They rebuild it in about 90 minutes, and handed it back to me. Threw that baby in and fixed the problem. Total rebuild cost was $125.00, and they make it look like new; much preferred than a rebuilt from some automotive chain.
Here are the measurements:
Battery voltage
before 12.7V after 12.7V
Battery voltage car running
before 12.8V after 14.45V
Current leakage
before 1.2A after .1A
The numbers speak for themselves.
I could do a write up, but I'm already done, and very lazy. Just unbolt and move aside the steering reservoir and secondary air pump and the rest is easy. No special tools, just 11mm 13mm and maybe one other similar sized socket. __________________ 
1998 (July) 318ti, 5-spd
OEM Armrest Blaupunkt Heidelberg CD50 CD Player/Compact Drive MP3 Player Diamond Audio 5.25" rear speakers Navman ICN 530 GPS BMWALARM.COM (with comfort settings) after market alarm system Magnecor 8.5mm wires M-Z3 Shifter/Momo Knob Burlwood Dashboard Stromung Exhaust X-brace Racing Dynamics Front Strut Bar Carbonio C.A.I. 17" Rial Rims Vader Seats/Heated/Lumbar Support M-tech Steering Wheel/Front Sway Bar/Front & Rear Bumper Depos/w 6500K Angel Eyes/6000K HIDs Clear Corners M3 Mirrors UUC Light Weight Flywheel/M5 Clutch/M3 Clutch Slave E28 3.46 LSD/Mcoupe Cover/E30 Flanges & Halfshafts UUC S.S. Brake/Clutch Lines Hartge Roof Spoiler BavAuto Springs Bilstein Sport Struts/Shocks E46 M3 Rear Shock Mounts SPC Front Camber Kit Reiger Hatch Spoiler BavAuto Rear Camber Kit Dinan Stage II Software Turner Rear Sway Bar Reinforcements BMW E46 Auto dimming mirror with Clown Nose alarm Engine Compartment Light Heated Wiper Fluid Retrofit OEM Fire Extinguisher Da'lan Trailer Hitch Rear Sun Shade OEM Fog Light Retrofit H & R MZ3 Rear Sway Bar/ UUC Adjustable End Links Cruise Control Retrofit On Board Computer Retrofit M3 twistie style side skirts Carbon Fiber Hood |