Shocks, or better called "dampers", resist motion of the springs and tires in the car's suspension. Without a shock absorber, your tires would be bouncing wildly whenever you drove over any sort of bump. Tires are like rubber balls, and they're held to the car with springs -- lots of bouncing potential there! Shocks also slow down slower movements in the suspension, like as the car leans to one side in a turn or squats down under acceleration.
The damping power of the shock should be matched to the springs and tires on the car, otherwise the springs will either overwhelm the shocks or the shocks will overdamp the springs. If you've ever ridden in a lowered car with an uncomfortable ride, it's likely that the owner just cut the springs for looks and kept the stock shocks. With the right shock, very stiff springs can still be comfortable.
Next time you're a passenger in a car on the freeway, look at the tires of cars around you -- chances are you will be able to pick out a car with dead shocks -- its tires will be "flapping" up and down over bumps, rather than just riding smoothly over them. It's a difficult thing to feel as a driver, especially if the shock has died a slow death. Without tires connected to the pavement, your traction and safety are compromised.
I spent the bulk of yesterday replacing the shocks on Arti's car -- a 2007 328i wagon. We bought the car new, and it has about 90K miles on it now. Overall, it's been a great car and still looks and drives very nicely. I've noticed though over the past year or so that it feels a bit "wallowy" in some situations. Usually I felt that in in sweeping turns with some undulations -- the car felt like it was moving around more than it should, and felt less stable than it should. Sounds like the shocks are done!
<a href="http://www.flickr.com/photos/thenobot/7124730511/" title="Arti at Laguna Seca by thenobot, on Flickr"><img src="https://farm9.staticflickr.com/8151/7124730511_f7fa2296a6_z.jpg" width="640" height="449" alt="Arti at Laguna Seca"></a>
I had asked for some recommendations for aftermarket shocks from a group of trusted friends. Koni has a shock called "FSD" which employs some magical internal valving to provide improved comfort and handling, but reviews on those were mixed. My experience with magic is that it's usually not great. I've had good experience with Bilstein shocks on other cars, and have a set on my current car, but it's set up very stiff -- stiffer than what Arti would like in her car. Bilstein sells an "HD" line of shocks, but while those are not as stiff as those in my car, people have said they're much stiffer than stock, and too stiff for stock springs.
A friend recommended Bilstein's "Touring Class" shocks, which match the original dimensions of the factory shocks, and provide a very slightly more sporty ride than the original shocks. They're designed to be used with the stock springs, and even come specialized for if the car has the "regular" or "sport" suspension from the factory.
I bought a set from AJUSA for about $400 shipped, and they arrived last week. I decided to put them on the car this past Saturday, and it ended up being a 6 hour job, including an oil change. It took so long mostly because I had to disassemble most of the rear of the interior of her car to get to the rear shock towers. Also, since we were using the stock springs, I needed to use spring compressors for the front struts. Spring compressors are medieval torture devices to punish those who don't have air tools. Anyhow, the job went smoothly with no damage to the car and only slight damage to my hands.
First test drive report? Great! The car doesn't have any unnecessary movements through fast turns or over bumps any more. Somehow the car is more quiet than before ... I don't understand how this could be, but both Arti and I came to this conclusion independently. It's still a very comfortable ride, but so much funner to drive now.
So if your car doesn't feel planted to the road, or has lost some of that feel from what you remember from its younger days, it's worth checking out if the shocks need replacing.