P0420 came back during the cold morning commute. Outside temp was 49F.
The only change was using 89 grade gas the last fill up. I reset the code and will observe further. Then fill it back up with 93 and observe.

Have filled up 4X using 93 grade and still no P0420. Did a 600 mile trip yesterday and still good. Weird.

It is probably the O2 sensors going bad. My girlfriends VW is doing the same thing. If you have the original sensors yet, I would bet it is them.

I cant remember if the 318ti can take the bosch universal sensors or not, but if they can, they are about 1/4 the price. the difference is they do not have the BMW connector, so you slice them into the old O2 sensor wire harness. Bosch website will confirm if your car can take them or now (typically the last sensor on the list) My GFs VW is fine now, no random PO420 code.

If you are passing the emissions inspection, getting good mpg, and dont care about the potential of damage to the Cat, i wouldnt worry about changing them. If the car had lower miles, i would suggest changing them. If you live in a state with picky emissions inspections (like where I live, or CA) I would change them. If you live in an area that doesn't do emissions once a year, i wouldn't worry either. Totally up to you and your budget. Not 100% sure it is the O2 sensors, which is why I am saying it is up to you. haha. $100 - $300 for sensors isnt something you may want to spend. if the car had lower miles, new O2 sensors will help MPG and would prob pay themselves off in 30k+ miles.

I got 36.3 mpg during the 600 mile trip. Still good mpg?
New O2 sensors before and after cat converter installed 8-18-2014.

So far no CEL P0420.
I bought new intake boot and fuel injector vacuum distributor hose and plan on installing it this weekend. Hopefully, I can reinstall my refurbished LSD as well.