Firstly I what type of pads did you have fitted? The original ATE pads have an kind of damping material stuck to the metal backing of the pad. This is designed to dampen the harmonic resonances which can occur whilst braking which leads to brake squeal. Anti-squeal paste serves a similar purpose but shouldn't really be needed unless the pads have no anti squeal backing. Secondly, did they machine the rotors? I would never replace pads on BMW's Mercedes, Porsches, Audi's etc etc. without either machining the disc rotors (or if undersize) replacing the rotors. The reality is that one of the reasons most cars of this ilk have good braking performance is due to the relatively 'soft' nature of the disc rotors themselves. This enhances the frictional 'bite' between rotor and pad. The down side is the rotors wear out faster than 'hard' rotors. I served my apprenticeship (don't ask how long ago) on Mercedes Benz and the rule of thumb was....Originally Posted by Dan in NZ
First pad change - machine rotors
Second pad change - new rotors
Third pad change - machine rotors
Fourth pad change - new rotors
Etc. etc.
So you can see that generally the rotors can only be machined once before being replaced. There are exceptions to this rule if you were using very soft pads and not hard on the brakes but usually the above is typical.
Even new or machined rotors with new pads require bedding in. If you are in the position to bed them in gradually over 200kms or so I would suggest that over a few hard applications of the brakes. Of course if you are using old non-machined rotors they will require a great deal more bedding in. Just avoid any panic braking situations until the brakes are bed in or you might be replacing more than your brakes!
The bottom line is that if driving a car like this you should budget for new disc rotors on approximately every second pad change. 'ATE' are the OEM supplier of brake components for most German vehicles and should be available from independant suppliers at much less than 'stealer' prices.