Bank 1 is where #1 cylinder is.
The Bank 1 is the right / passenger side. The cylinders are (from the front to back) 1-2-3-4
The Bank 2 is the left / driver side with cylinders 5-6-7-8.
The sensor 1 is located BEFORE the catalytic converter (between the engine and the cat. converter).
At this age I suggest to replace all 4 O2 sensors, not only one - BMW recommends to change all @ 100K miles anyway. I also suggest to use OE parts, for the "universal" O2 sensor -without the connector- you will just waste your money.
Zee