the top area with the cap is mostly of the times wet from the atf oil inside the reservior.
Every time i clean it after a week it's the same again. I have Mobil 1 ATF.
Is there a solution to this, is it maybe the top cap or the rubber ring on the cap that needs replacing. I noticed a small hole in the cap, guess this is kind of vent, it culd be that oil is coming out of this but not sure.
Note that only the top area of the reservior is wet, not the bottom.
How this can be fixed or should i buy a new reservior?

Its possible either the cap gasket is not sealing or the PS fluid level is too high. ATF does have a healthy temp expansion index.
I would check the owners manual to see what the conditions are for checking the PS fluid, hot/cold or engine on/off. If level is correct might try draining some out to where level is closer to low marker.

the level is OK.

fuel cavatiting due to overheat. do these cars have P/S cooler?

you autocross?

and i'm not aware of any p/s coler.
I do drive at high rpms (over 5000) about 20% of the times.

Check the clamps holding your power steering hoses. BMW uses terrible crimp-style clamps which tend to leak all over the place. You can replace them with the screw-type hose clamps which won't leak. Do a search on this, it is a common issue.

that few years ago and it is bone dry on the bottom. This leak is on the top only.

If you spend much time above 3500rpm you will find that more PS fluid will vent from the cap. The cap ot the PS reservoir does have an o-ring seal, but it also has a vent hole for pressure equalization. With sustained high rpm usage the fluid will tend to foam and overheat and more will be released from the vent.

I've heard of drivers placing an old sock over the PS reservoir when they track the car to keep from spraying PS fluid around in the engine bay.

so true, I will change ps Mobil 1 ATF to Redline D4 ATF and hopefully will be better at high temp.
Since ps pump speed-pressure depends on rpms than foaming at high rpms is caused.
I need to know what kind of cloth is that racing drivers use to cover the top, i don't feel comfortable with a regular socs it could cause fire at high temp.

Your average run of the mill athletic sock should be fine, since they usually have a higher natural fiber content. The temp won't get high enough to create a fire hazard for either, but a purely synthetic sock won't do a good job of absorbing the oil.