Totally shite cars mate, don't ever buy one....
On a serious note, I've had one for nearly 3 years and love it to bits, I want a new car but nothing out there takes my fancy, only a modern diesel manual BM would probably suit my circumstances i think so no point in changing.
As booner has said they were a +£60k car new so the build quality is not even a topic for discussion, there are no issue there. Generally they are very reliable, and no Vanos issues at all that i've ever heard of apart from the usual internet rumours, for every story you read there will be 10 thousand other cars that will be fine.
Your main expense will be fuel, mine averages 18-19mpg and i use it everyday, costs me about £80-£90 a week in fuel, I mainly use it in town so that would be largely urban consumption.
Servicing is not cheap, I don't know if you are familiar with BMW servicing but you get 3 types of intervals, oil service, Inspection 1 & Inspection 2, the car will dictate when and what it needs. i would say about £150 for an oil service, £200-£250 for inspection 1 and £550 for inspection 2 from an independant, BMW main dealers will charge you a lot more, my first Inspection 2 from a main delaer was £750, and the last time it needed an oil service they wanted £240, but they don'tneed serviced that often so it's not as bad as it sounds.
Brakes, Hmm it's been a while since i did mine, but if i remember right I was about £600 for front discs (ONLY BUY OEM, DO NOT WASTE YOUR TIME ON ANYTHING ELSE). Brakes are a bit of a soft spot because it's an old heavy car, a lot of people add cooling ducts from E39 sports to assist cooling as front discs are prone to warping, also the usual braided lines and yellow stuff pads with uprated fluid will really make a big improvement.
If your are buying parts I get all my bits from bmwminiparts, they will be the cheapest out there, bar a coupkle of items i would only buy genuine BMW parts.
"Most" cars use oil, it is rare to find one that doesn't, and if my memory serves me correctly Stu's is one of those rare beasts that doesn't need topping up every 800-1k miles. This is normal, don't fret about it, the oil can be bough for £40 from Eurocarparts, ONLY use 10w/60 Castrol EDGE, the one that specifically states "for M-series" on the bottle. My car usese oil, it always has, and it's perfectly fine, just make sure you always have a supply handy in the garage, not every autoparts shop sells the correct stuff.
Facelift and pre-facelift cars:
Facelift came out late 2000, this has grey dashboard clocks, better steering wheel (same as E46 M3) and bigger satnav 16:9 screen, crystal rear lights and angel eyes. Also rumoured to have a diferent piston ring design to reduce oil consumption but i'd suggest you read up on that yourself, mine uses oil but is an early facelift, so could well be it doesn't have that update.
Road tax, if you buy one registered pre-march 2001it will be £200 for tax, a newer one will be alot more, i don't know how much becuase mine is Nov 2000, so i get facelift AND cheaper tax for the same car
A couple of other experiences i've had- recently did the clutch and flywheel with bits supplied from Matt Lewis, the BMW parts are made by LUK so don't buy through BMW or you will pay about 3 times the price. I got my clutch and flywheel for £540 i think or thereabouts, mega saving over buying it from BMW. Also had a recent alternator failure (which is uncommon) but i had a fuel pump failure in Nov which IS common, people tend to replace the fuel pumps at 100k as a rule of thumb, but mine went at 120k. Rear diff seals are also bad for leaking, it's the seal for the input shaft/prop that goes, easy to fix though. gearbox can be notchy from cold as well but goes away after 10 mins, i read up about this a lot and it seems people moaned about this when the were new so it's not uncommon.
Tyres can be pricey (depending on your definition of expensive), they're staggered fitment, rears are 275/35/18 and the front (i think) are 245/40/18. All in all a truly magnificent car IMO, nothing for the same value will touch it, but it's obviously expensive to run or everybody would have one, right?
So why do you want an M5, have you always fancied one?