Hi just bought an 05 Mini Cooper S and am wondering if using premium gasoline is mandatory as the manual seems to indicate(actually guess it says recommended)? What problems could it cause if I used a lesser grade?

 

With an S I would NEVER run non premium you are asking for problems.
The Supercharger is a huge performance upgrade and running non premium fuel the computer will dial back timing/performance to prevent detonation

I noticed a huge difference just running midgrade (they were out of premium)

A good freind is a service manager at a Mini dealer and he summed it up
You can pay $1.50 per tankfull or pay me $2000 for a head job when the valves build up (and they will)

One of the club members bought an S the same time as me , I have 80K miles no motor troubles , he wouldn't believe me , and he's on his second head (first in warranty ) and second cost him $3000 and he only has 60k

 

Thank you, sir for the info--premium it will be then and as you say"Pay me now or pay me later." Would certainly like to avoid any major engine issues with this vehicle and so would appreciate any other suggestions you might have(short of selling it)-thanks in advance.