The common belief is that the BMW logo is a rounded, stylized representation of a spinning propeller blade (the company build military airplane enginges originally). However, it actually predates airplane engine production by more than ten years. The emblem evolved from the Rapp Moternwerke company logo (which later grew into BMW), with colors from the flag of Bavaria incorporated.
There’s still some uncertainty with this logo’s history, for BMW’s own employee training class teaches their employees the airplane propeller version. Users report that even the head of BMW North America states the logo represents propeller blades. The debate is pretty much over, though. For a nice – if a bit long – explanation, follow this link.