I've just had this light on a couple of weeks ago. It indicates a fault with the abs or traction control system. In fact I've had it 4 times since i bought my e39 523i 5 years ago. Every time it has been a faulty ABS sensor. Is the cruise control working? If not then it is the RH rear sensor at fault. That was what was wrong with mine recently. The dealer replaced it at a cost of Ł191. The cost was more cos they had to drill out the retaining bolt which had seized and sheared.
Hope this helps
Mines a 1999 523iASE with 44000 miles. Titan silver, beige leather.Owned from new. 16 inch original alloys.