Hi Tim,
Sorry for the late reply, I have been away for a while. The chipping is beginning to occur as shown on the image. I would think with your mud flaps it would protect these areas. The web address for the pain protection I got is at http://www.premierpaintguard.com
I also noticed you have a z3? do you still have it, what engine? I jumped from the z3 to the new z4, but kept hold of the 3 as I have had it since new and is immaculate and couldn't part with it.
Hope you are enjoying your car!
Cheers for the pic and link

where you have highlighted is where I would expect chipping too occur, so glad I fitted the mudflaps now to be honest, I'm guessing the sills are plastic but I'm a bit anal trying to keep the paintwork in good nick.
Still have the Z3

in fact I'm using at the mo so the Z4 is tucked up the garage on a battery charger

MOT is due next monday

Its only the 1.9 but is the Sport version with Mtech suspension etc and have added a fair few ACS parts. I originally bought it as it only had 21k on the clock, that was 4 years ago and is just coming upto 24K

Its not fast but still drives nice and still prefer the looks over the E89, much more classic roadster, like yourself couldn't part with it
Cheers,
Tim.