This is how the marketing men describe VSS:
Variable sports steering.
Sports driving dynamics meet maximum comfort: The variable sports steering adapts the angle of the front wheels to the actual conditions so that the BMW 3 Series Touring reacts more or less directly to the driverís steering commands.
The steering wheel movements required for large wheel angles has been reduced by up to 25 per cent. Parking and cornering thus become easier and more comfortable because the driver has to exert less effort. Handling qualities also benefit, such as when rapid evasive manoeuvres are required.
In the case of smaller steering angles between zero and 100 degrees, the BMW 3 Series displays accurate tracking and high stability on straight stretches while conducting steering movements with impressive precision. The steering ratio in each case is determined purely mechanically by a variable transmission for the steering rack.
Certainly gives the impression that it's about more than parking & tight manoeuvres, e.g. "accurate tracking and high stability on straight stretches".
I got VSS on mine as part of spec'ing the Sport Auto box.