Found this:
"According to Thecarmarket.com, traction control helps to "limit tire slip in acceleration on slippery surfaces." The main purpose of traction control is to potentially eliminate situations like spin-outs or hydroplaning through sensors that monitor wheel-spin. If slippage is detected, engine power will be cut down and/or brake pressure applied without driver interaction.
Snow
Tires spin a bit when trying to gain traction from a stand still in the snow.
The vehicle sensors act on this loss of traction by reducing engine power to the wheels.
Turn off the traction control to maintain power in start off situations.
Burnouts
Although burnouts are not necessary for driving, they are popular at a car show or short race.
Vehicles will not burn out to their maximum potential while the traction control limits the amount of tire spin.
Submerged Wheels
Any vehicle that is stuck in mud, snow or ice must have the traction control shut off to spin the wheels and gain momentum.
To get out of this situation, the wheels have to spin to find traction or to allow the driver to "rock" the vehicle back and forth to roll out of the area that the wheels are stuck in.
Racing
For racing, speed and gear shifting go hand in hand.
It will not be necessary to keep the traction control on because any instance of reduced engine power to the wheels will defeat the purpose of racing.
Drifting
Drifting is a vehicle activity that gains more popularity every year. In order to drift (or slide) around a turn, the traction control has to be off.
Traction control will reduce engine power and apply outside brake pressure to eliminate sliding, which is necessary for drifting."
Links:
http://www.answerbag.com/q_view/1930083
http://www.bimmerfest.com/forums/arc.../t-646563.html