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CCBOYE,
buyback/repurchase: Under California law, BMW would refund all monies paid on car (not including aftermarket items) less a % for mileage as follows: # of miles when first taken to dealer for the reason BMW is repurchasing divided by 120,000, and then take that number times the purchase price. Usually comes out to a small deduction for mileage. Then as others have said, you can choose to buy another BMW or any car.
replacement: BMW replaces car with one that is similar. You can usually get them to order a new car thru your dealer to your exact specs, and drive your current car until the new one comes in. The new car simply replaces the car you had and the number of months left on lease or loan (if applicable) still applies.
typically, BMW customer service is flexible. Since they already offered to repurchase the car, which typically is the harder option to get, there is no reason I can think of why they wouldn't agree to a replacement that guarantees you stay in the BMW family.
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