In Reply to: I found same on mine? Cupholder upgrade! (m) posted by Peter 97m3/4 on January 29, 2001 at 14:19:37:
I found that plug when I installed my armrest too. No idea what it's for. I love my arm rest too, had one for 4 years in my 1995 325. I actually pinched the brake light wire during the install and had to splice in a new (longer) wire. Pretty easy install though.
But those 1997+ cupholders SUCK! I just received a ~1995 cupholder insert that should fit in the cupholder and actually prevent cans and travel mugs from flying out during braking or cornering. I have yet to stick it in the car, but Ron Stygar says it should fit. About $5 and change from Nick Alexander BMW.