If your car is "chipped"..meaning your Master, Wallet, Valet keys has a chip that signals the engine to start...then you need to install that chip into your cylinder lock behind your steering wheel for remote start to work all the way.
I had the same problem with my 1995 318i...and I went to the dealership bought a little ass plastic wallet key for $59 and I took it back to the installer and(...although I didnt see what he did exactly..) he just used the chip in the remote start module and inserted it into the car so the car could remote start from my BMW key fob....(my alarm is called PRESTIGE by the way)
So, guess what? It didn't work and worse I got home and my car didn't start with anything (keys, remote..paperclip) for two days... I eventually towed it to a BMW dealership and they told me I needed a new cylinder lock....

I paid $580 and they installed a new lock...
I went back to my alarm installer guy

and told him my drama

and that I don't need remote start since it was way too much trouble

. I got my money back from him even though he was sure it should have worked

used . Anyway that drama was July/August 2004.
Now get this, last Thanksgiving Dinner, November 2004, It was cold outside and I gave my girl my car keys with the keyless entry fob (it still has the remote start button-but i never used it) and told her to go ahead and start my car since I was waiting to get some doggy bags from my moms. 3 minutes later I get outside and my girl is sitting in the car with the heat on blasting full and the radio and headlights are all on. I look at her and she hands me the keys as I sitdown in the car...I was like WTF?!!!!The keys were nt even in the ignition!!!
apparantly she was trying to unlock the door with the keyless entry button and hit the worng button a few times (the remote start button) and it actually started the car.
Now...this is where I answer your question....
when i put the key in the ignition and turn if I do NOT step on the gas and rev it past 1.5 RPMs the engine shuts off.
Anyway so now my remote start works...but that is how you do it...
my car is awesome...that was a cool surprise!!