Sorry...I should have been more specific. All Bosch cars have this feature (with different tricks to access it), some American cars have it too. It's the way things were before OBDII and code readers.
You're definitely counting the blinks. The pauses are important too because they tell you if you're between codes.
The codes are a little hard to read until you get some practice. I take a tablet and jot them down because I forget them as they blink out. They're all four digit codes, and when you get the stomping just right it'll start blinking. They look random but they aren't...and you have to pay close attention. If you miss one, that's OK, they'll keep repeating as long as you keep the key in position 2. Here's a list of the codes:
http://e30world.com/fuel/BMW-E30-DME-Motronic-fault-codesThe light will start with a long (4-5 seconds) blink on. Then a long pause (4-5 seconds again) and it'll start into the codes it has stored. Each code is four numbers, it'll blink them out quickly with shorter pauses between the four digits.
When it's all done, it'll give another long blink on and start all over again.
For example, when I tried mine I saw this pattern with the check engine light:
Long flash (lets you know that it's starting the sequence)
long pause
one quick blink, short pause
four quick blinks & a short pause
four quick blinks & a short pause
four quick blinks & a long pause...then it starts all over again with a long blink and repeats until you turn off the ignition or break the instrument cluster out of sheer frustration :rolleyes:
It's a code 1444, 'No Codes'. I'm all clear...no troubles at all

You might get that even if the car isn't starting...it's frustrating at times :mad:. I did have a code 1215 (AFM) when I bought the car, but it ended up being a vacuum leak. The codes are just clues, don't replace things willy-nilly when the ECU/DME/computer starts telling you they're bad.
Oh yeah...one more thing...if you have multiple codes it'll do them in sequence. Even if you mess one up, you can catch the others and wait for it to repeat. Sorry for the short novel here, but it's hard to explain it...but when you understand it you can impress your friends with your psychic mechanic powers.