The error fault came back over the weekend, and so its more serious that I thought as its the 2nd time in less than a week. Unlikely to be a one off thing, as through the 10 months or so ownership I've never experienced this error. So I sent the car back to AB during lunch, and on the spot they offered the software upgrade as per TSB, and also checked for steering column availability. Based on the TSB, they are trying to see if the SW updates resolves this first before changing out my steering column and replacing the lock mechanism.
The resolution follows these steps:
1) SW update
2) Replace steering lock mechanism
3) Replace entire steering column.
(3) is a major job and I'll have to leave the car there a few days, and somehow if its not broken I rather them not dismantle the steering column and replace a new one. I'll see if the problem comes back after the update.
They also replaced the rear air cond metal frame (beige) for my car as the paint was peeling and its a known issue on early batches of E90's. Looks nice and new now heh.
One more thing, with the software update, I didnt get the 07/08 goodies like the angle eyes lighting up (when lights in A mode) on unlock of the car. Hmm.. Might only be equipped with cars with Auto High Beams (ie a Gun looking light sensor underneath the normal rain sensor on newer batches of cars).