Steptronic is a transmission option offered by BMW and in many late model BMW and Rover vehicles.
It is a variant of the Tiptronic design, which means it is essentially an automatic transmission in which the gear is user-selectable, also called "Manual Override Automatic". With the gear selector in a special position, it can be nudged in one of two directions to select the gear preferred. However, like an automatic transmission, the on-board computer will override your decision and either keep the vehicle in the selected gear or shift to a different gear should the onboard computer deem it necessary.
Many enthusiasts say that this ability for absolute computer veto takes all the fun out of it and indeed make the feature pointless. Still others say that the system is a fair compromise between both worlds offering quick acceleration when wanted. Another common complaint is lag when shifting, possible due to locking torque converter issues.