You need to make sure that you have a specific SRS airbag tool. I've got an article on this right here:
http://www.pelicanparts.com/bmw/techarticles/Mult-Air_Bag_Lamp/Mult-Air_Bag_Lamp.htm If this is the tool that you have and it won't connect, I would contact Peake Research for assistance. If you still can't get it to work, then you'll have to find someone with an AutoLogic computer or a factory computer who can read and reset the codes. On the early cars, sometimes the electronic bus that controls all of these computers can be finicky.
- Wayne