My first trip to KTP was in a Honda Ballade during the time the tar road stopped at Ashkam and you still had a terrible gravel road of 60 km before the gate at Twee Rivieren. We stayed in Nossob and only had red sand in the car for a long time thereafter.
The road up to Melkvlei is fine for a sedan and along the Auob river including the dune roads. It all depends on the season you are going in. End of Dec the roads can be very bad due to the increase in tourists over Xmas / New Year period, but should be better around Jan - Feb. The only problem in Dec and summer months up to April / May is the sudden thunderstorms that can results in the roads turning into small rivers. That can however be a bonus, because you might get very rare bird sightings e.g. of flamingo and spoonbills after a good storm.
Even 4x4's can struggle on the very wet roads, but I can add that in Dec 2011 when the road between Twee rivieren and Nossob was closed, some-one arrived at Nossob camp driving a Merc. Maybe the Merc will be better to take instead of the BMW
If you plan to stay for only a few days TR will be fine and you will be able to venture quite far off without any problems. Why don't you think of adding another 4 days and book at Nossob / Mata-Mata as well.
I will PM you some good spots around KZN towards Cradock. Do you plan to take the Harrismith route or Transkei route to Cradock.