Went to the car show during the week and took a look under the hood of the current 128 and notice the heat exchanger. Mine's an 08 doesn't have one. I'm assuming that they are on turbo cars. I recently read a review of the x1 which is the turbo 4 and they talked briefly about the the heat exchanger. They referred to it as an oil water exchanger. It's functionality is to used the coolant to warm up the oil during cold temperatures and to cool it down during hard driving.
x1 engine bay with water/oil exchanger