Rear LSD conversion
 

Way premature to be thinking about this as I don't even own an E61 (yet), but I have access to the largest M5/M6 parts warehouse in the world and was looking at RealOEM to determine what can be used from the E61 M5 to the 535xi.

The rear axle carrier on the E61 M5 has a different part number, but ironically is identical to the E60 M5 6MT, so not really sure what the difference is there. The rear LSD diffs are the same from the E60 to E61, so that's an easy part source that would primarily be aimed at getting the larger drive shafts that go along with the M rear end (and hubs of course).

My question is, what would be the effect of adding the M LSD to the rear of an XI, assuming the final drive ratio remains the same as the original XI rear diff?

I would think it would benefit handling until you're at the limit since the DSC/DTC system is reactionary based on wheel slip, no?