My headlights only have 7 wires in the diagram they show 11. Do I have to run more wires to my lcm?

No, look at your headlight correctly - you'll find another smaller connector with 4 wires in it.

I just checked again to be sure. The harness only has the single 8 pin connector as shown here and on the back of my halogens.

http://s9.postimg.org/hv18j4r8b/IMG_1778.jpg
http://s29.postimg.org/pao1yoasz/IMG_1781.jpg

I have a 2006 530xi with adaptive xenon. Yours don't look like mine, I'm guessing your existing lights are halogen. The second connector on mine is just below the large one. In your picture that would be upright rectangle to the left of the large connector in your bottom picture. Not sure why there are pins there. Can you find the BMW part number molded into the part?

The part number for my halogens is 15876100-LI

You have pre-LCI halogen. They don't have the extra connector. You want to go to LCI Xenon. That's going to be a big job and hassle. If you have the BMW upgrade kit that member quanger mentions, it is pre-LCI Xenon to LCI Xenon. It doesn't work for Halogen to Xenon. Have a look at this thread:
https://5series.net/forums/e60-parts...-xenon-132704/

Yeah I realize there is a bit of wiring to modify.These halogens aren't going to cut it. Hopefully I can get some more info from members who have completed this project.

Black, I know this is too late but my understanding is going to lci halogen is ALOT simpler. You get a projector and can throw in some HIDs and you would basically have you will eventually end up with but cheaper.

this shouldn't have been hard, provided you had the smaller connector too, it is supposed to connect here: https://i.imgur.com/ON0w1J5.jpg

and it controls the levelling of the headlight. Do you have a rotary knob next to the light switch to make them go up and down? (I thought this would be standard across the whole world!).

If not, they will still work, just they won't move up and down and left and right if they are adaptive. You'll need an LM2 for the angel eyes to work too, unless you slip in some low power leds.

Yes,my car is 01/07 so it came with the lm2. I've been in contact with member BlaSTiWi. He completed the same conversion a few years back . Once I get the information from him I can share it with anyone interested. Thanks for all the input.