Figured it out with great thanks once again to this forum, quote from other thread:
Just an update on this old thread from someone who has just fitted this retrofit CC kit to a 2.0 (N46), E85, 2008 version of the Z4. All went as planned until I came to join the DME wire. I attached the blue "repair cable" as per the BMW instructions (which was indeed the correct one for this vehicle). However, I then removed the black 26 pin plug from the DME to find that there was already a wire in pin number 4 (this is the pin that the BMW instructions say to connect to). There was no mention of this fact in any of the instructions so I spent the next few hours hunting the net for more details with no luck. I then noticed that on the first page of the BMW instructions it does say that "if any pin chambers are already used, to use double crimps or twin terminals". I also checked the wiring diagram for this connector which simply says that pin 4 is for the cruise control (only). So I removed the wire already there and connected the new (blue) wire to pin 4 in its place (and left the other loose for now). All seems to be working perfectly . The CC is working as it should and I have no other errors or problems I can see at present. I have left the original pin 4 wire loose for now (safely). If anyone knows what this "spare" wire does please let me know. I hope this helps to make the job a little easier for someone else with a 2.0l version.
It's in and working.
Quick note, the BMW instructions did not mention that the block was black which would have helped!
z4-forum saves the day again!
Sean