Wire Going Into Door Handle?
 

http://img133.imageshack.us/img133/5...mage002vq5.jpg

1. What does the thing, rectangled in pink, do? The drivers side one has been cut and the wires on the square shaped object are too short to connect up.

2. I took one out of a 316i from a salvage yard from the passenger side door handle, can I put that into the drivers side door handle?

Probably the door lock defrost. Just a guess though.

some of the bmws have a function that when u lift the handle it turns the interior light on as well