It could be the differential, but rear bearings are the more likely culprit.
I did mine a couple years ago and it was a pain.
Jack up the back of the car and spin / shake each wheel to see for sure.
A bad bearing can make for a considerable amount of play in all directions.
I used the instructions here to do mine:
http://www.teamdfl.com/bmw/e30/rear_...ngs/index.html