Matt,
I imagine that you have 16's now right? If they are a 55 cross section and you go to 17 inch wheels and a tire with a 45 cross section to maintain the proper rolling diameter (which you REALLY don't want to mess with) I doubt that your ride will suffer much added harshness. I went TWO steps at once, and run 35 to 38 psi most of the time, and I think it rides fine. Of course mine had the 15" 225/60 balloons on it so it is not the same comparison.
I think the modern BMW suspension is sophisticated enough to maintain a good highway / city ride with a good street 17" tire wheel combo..
Yes, I am sure you have bolts, rather than nuts holding the wheels on. The wheels are all hub centric, and you should get new ones that are as well. The proper bolts should come with the wheels if you are dealing with a professional house.
Good luck...
