what a coincidence ratbastard we're in a similar boat!! and the funny thing is i was gonna leave a post pretty much like yours. ^^ i live in michigan and have the 330i pp.
the 16s prob won't work w/ your car. as MrElussive said, 16s won't clear your calipers. i was told that when i took my car into discount tire. now i'm looking for a cheap but descent wheel/ snow tire combo not steel, since having the pp w/ black doughnut prob won't fly
i realize i'll prob have to drop at least a grand to get a half descent 205/50 17 inch snows.
one thing you should do is to try to have the same size and width for all four tires, unlike your summer tire configuartion, just so you can rotate them the following winter to maximize tire life. and as mentioned above, the narrower your tires, better the traction in snow. since it forces more downward pressure (ie car's weight) to smaller contact patch, helping your car to dig into the snow better, allowing better traction.