I have a 1990 740 GLE 16v with a very noisy differential, has to be at least a
bad carrier bearing from the sound of it. I also have a 1987 760 Turbo parts
car with a good differential. The only problem I can see is that the speed sensors are different and mounted on different spots on the rear cover plates.
Has anyone done this switch? Can the cover plates be swapped? I know that the
speedometer hookups are not the same on these cars, so in order for it to work
at all the wiring loom for the '90 has to remain with the car. Any thoughts
would be appreciated.

Besides having differnt ratios, the pulse wheel in the differential is different for ABS and non-ABS cars. Your 1987 car is probably non-ABS, and the 1990 is probably ABS. If this is correct, switching rear ends will cause ABS and speedometer problems which you will not be able to overcome.

There is a signal convertor which can be used to install an ABS rear end in a non-ABS car, but you can't go the way you would like to.
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john

John,
Thanks for the info. This makes sense. Can these differential bearings be replaced with normal tools, or are there specialty tools involved? I'm not afraid to tear the diff apart so long as I think I can get it back together.

If your differential is making noise, it is too late for just bearings. A new ring and pinion will be necessary. Your best bet is a used differential from a car with ABS. The local U-Pull It yards get $45 US for one. For that price you can't do any work on one. I believe your 16 valve car has a 4.10 differential. That ratio is also used in normally aspirated station wagons with AW70L transmission.
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john

Yep, the 16v does have the 4.10 rear and the AW72L transmission.... makes for a fun combo which keeps the engine right in the powerband =)

speaking of the differential, does anyone know where to get a gasket? Mine leaks!

Cliff Scott
89 740 16v <-lives between 4-6K rpm