What BMW is offering is a full value (price originally paid) when the MC is traded in, as well as free service as mention by Adam, at the end of a three to five year period. The Beemers make great highway bikes for law enforcement, however several city riders complain that it is not as comfortable as the Kawasakis or HD's for short term low speed riding. It is reported however that Kawasaki is going to cease making the "Police 1000's" in the near future. Another one to consider is that Harley Davidson is making a come back in police motors. Here in King County Washington they use both the HD and the BMW. Idaho State Police use the BMW, while city cops still ride the Kaw's.
Several US cities have used Bimmers as patrol cars. I do not think BMW will ever get the "police car" business in mass, because they cannot produce or offer them as cheaply as Ford, GM and Chrysler. Nor do they want the "rental car" status it would bring. Rumor has it that Chrysler wants back in the police car business.