The steering knuckle, aka carrier, has no >>
moving parts. If it's loose, it's damaged.
Item 2, here: http://www.realoem.com/bmw/showparts.do?model=DM63&mospid=47585&btnr=31_0255&hg=31&fg=10
There are arms which connect between it and the chassis. One or more of those joints could be loose.
Look at the red part in this illustration: http://en.wikipedia.org/wiki/MacPherson_strut
Ed in San Jose. BMW CCA member since 1987 (Nr. 62319). Golden Gate Chapter. '97 540i 6 speed. Build Date 3/97. Aspensilber over Aubergine leather.