Lou...
The usual DIY test of the front wheel bearings is pretty simple.
With bike on the center stand, hold the fork legs steady with a knee or leg bone, grip the tire at top and bottom and try to rock the wheel side to side. You don't want any motion.
New wheel bearings are available at a local bearing supply as are the grease seals. Bunch less money than at the BMW stealership. Sizes are listed in the parts fiche.
http://www.ascycles.com/Illustrated_catalog/R65(78-85)/catalog_frameset.htmlCheck the bearing races for pitting and/or rust. Rust? PO's may have been overzealous at the local car wash and forced water into the races.

The bearings are tapered roller units. Not terribly expensive but unless set-up and installed properly they may get sloppy over time.
Rollin' Bob is correct about the spacers but I'd first try removing the bearings, clean them, re-grease and reinstall with new grease seals. The roller bearings must be fitted with a bit of pre-load; remember, they're tapered bearings.
Bring up the axle torque
before you snug up the pinch bolts. I'll bet you'll have a better
feel afterwards. BTW, My 1986 VW Cabriolet uses tapered rollers on the rear axles and the pre-load procedure is to snug up the axle nut until the wheel will not turn, then back off about one flat on the axle nut. [smiley=thumbup.gif]
Monte