I just gave the okay to buy a 05 745LI with 37k miles on it. It is being purchased from a BMW dealership and when I test drove it for the first time. I heard what sounded like a belt noise( like squeaking). I tried to listen for it but after about 4 mins of driving it went away. Now I'm a little scared that something maybe wrong. But I don't want to back out of a deal I already agreed on without proof that something is wrong.

What should I do to make sure I'm not buying into trouble?

Until you are the legal owner the only thing they can do is be pissed off at you. What if it turns out the motor blows? That could be $6k-$10k.
Until you are absolutely legaly obligated to buy it you shouldn't have to have a reason not to buy. There are plenty of BMW dealers to buy from and if the salesperson gives you crap let the GM of the dealership know. The salesperson will pressure you for the sale and won't let you slip away easily.
Or make sure it is a CPO car and don't worry about it :-)

The car is a CPO car and they said I had a warranty until 2011 or 100k miles whichever comes first. Does that make it okay for me to purchase?

How many miles and is it certified. If it is, don't worry about it. Sounds minor and maybe a belt warming up. Is the sound coming from the valve covers or the pulley's? Could even be the water pump. Ask them to look into it and document it even if they find nothing.

There are certain advantages in buying from a dealer and you should be fine. They won't walk away from an issue, especially if they can warranty it.

Listen again for the sqeek and note whether it is more pronounced when turning the steering wheel in both directions fully. Keep in mind the car may have been sitting for quite some time.

These cars have had thier share of issues in the early model years, but the engine has been rock solid. The tranny's have had issues down shifting. Check this out by coasting to almost a complete stop and then gassing it pretty good. If it slams into gear, have them check it out. There is a bulletin out on the tranny's.

I had an 02 prior to this which was supposed to be the lemon year and I had very good luck with it, best car I ever had, so I bought another.

at37k with the CPO warranty you will be fine. What you hear, I believe, is the secondary air pump<?>. Even if it does go bad, its no big deal. There is also a slight chance a belt is bad. Ask them to change the belt (or is it belts on these things?) for good measure. Make sure you get a print out of ALL maint. performed on that car since it was new.

I love my 05. What options does it have?

at37k with the CPO warranty you will be fine. What you hear, I believe, is the secondary air pump<?>. Even if it does go bad, its no big deal. There is also a slight chance a belt is bad. Ask them to change the belt (or is it belts on these things?) for good measure. Make sure you get a print out of ALL maint. performed on that car since it was new.

I love my 05. What options does it have?

Navigation, Xenon Headlights, Premium Sound Package, Convenience Package, Sport Package, Park Distance Control, Heated Front Seats and Comfort Seats.

It may have more but I'm only going by what is listed on the site.