There are special desinfectants on the market to clean the heat exchanger which sits just right behind the firewall.
You said that you changed the filters already. Please be reminded that there are 2 under the hood and also 2 (?) inside of the passenger cabin.
There are professionals who clean these systems. These heat exchangers are a breeding ground for bacteria.
Is there often moisture inside the car on the front window? It might be that the moisture from the heat exchanger is not dropping out of the car cause the drain holes are clogged. Check that one out.
You can also try by yourselves to 'sterilize' the system by using 75% alcohol in a spray bottle. Set the system on recirculation and spray this alcohol mixture into the air suction system.
On my website below there is a special page for the E38 in English, e38.org. Go to that site and look for the tech tips to change the filter system.
And do not drive immediately after you used the 75% alcohol for cleaning
If you prefer English language boards, here are the best ones:
http://www.bimmerboard.com/forums/e38/
http://bimmer.roadfly.com/bmw/forums/e38/
and local ones in your area:
U.K.:
http://www.the7seriesregister.co.uk/forums/index.php?
http://www.bmwcarclubforum.co.uk/
http://www.bmwland.co.uk/talker/portal.php
NEW! Soon coming
http://www.bmw7resource.co.uk/