Reading through the various methods and debates out there about changing the timing chain tensioner, most call for installing the tensioner compressed as it comes out of the box, then once installed rev the engine to 3500 rpm and cross your fingers the loose chain will slap the chain rail against the tensioner to release it before the chain jumps a tooth or 3. The whole reasoning behind this method is that you won't be able to install the chain tensioner once its extended. I don't know how this idea got started but I think its WRONG. Here's my simplified method.
1. Remove the old tensioner via the 19mm bolt on the passenger side of the engine. Once out it will look like this. Old extended tensioner is on the right, M44 style compressed tensioner on the left.

2. De compress the new tensioner by pressing the ends down against the table with your hand and twist about 1/4 turn. It will pop out and look like this.

As you can see fully extended the new tensioner is slightly longer than the old tensioner. This is due to wear on the old tensioner spring and part of the reason why it needs to be replaced.
3. Install the new tensioner the same way the old one came out. When you reach the point where you need to thread the cap back in, apply pressure to the tensioner. My guess is that it takes about 20 lb of pressure to compress the spring with one hand on the head of the cap. Its not that hard to compress. The cap can then be tightened by hand when the threads catch.

4. Tighten the cap with a 19mm wrench to torque spec. Since I don't have a torque wrench just used my own estimate. Remember that the threads are in aluminum so don't over do it. Think of of it as an oil drain plug. I removed the valve cover to paint it as well as inspect the timing chain gears but its not necessary. In the red circle you can see the head of the new tensioner fully extended.

5. Once everything is buttoned up, start the engine and let it idle. You will get a very loud chain noise for a split second until oil pressure reaches the tensioner, then it will get quiet all of a sudden. You don't have to rev the engine. Just let it idle for a minute or so. It should give you time to check for oil leaks from the tensioner bolt.
Remember that this isn't the only way to replace the tensioner. The 2 articles below outline a different method that has been proven to work effectively many times over. I'm just offering another alternative that worked for me.
http://www.bmwe30.net/cgi-bin/datacgi/database.cgi?file=articles&report=view&ID=00072&Section=08http://www.esatclear.ie/~bpurcell/318isfaults.html#timingchaintensioner