Tiffa,
BMW adopted a new design for sparking early on.
Instead of using a distributor and a single coil to spark each plug, they developed a system to place a coil above each plug. The computer then triggers each coil pack when needed to create the spark.
This helps in two ways... The first is there are less moving parts and things to adjust (distributor, rotor arms, hall effect sensors). The second aspect means the computer can control precisely the timing and create greater sparks by having less distance between the coil and the plug.
You may benefit by replacing the coil packs as yours would be rather old. If its not misfiring.. i wouldn't bother! They are rather costly.
Before replacing the coil packs, i'd check for oil in the wells as the gaskets can fail and leak into there causing misfires.. plus smell and smoke.
A general tune up consists of the following: oil, oil filter, air filter, plugs. Past that you go to coolant, transmissions oils, brakes and fluids. Do these and it should be pretty cool
J.