I have a 06 Cooper S that I am considering having the stock Run Flats replaced with the following:
Yokohama S.drive205/45R-17 88W XL B

mounted on these rims...
MB Five X17X7 4-100/114 42SM

I am going from the stock 16" to 17" since there are many more options for tires and rims but also because I have read that they're more quiet and a smoother ride.
I am concerned about 'wheel rub' though. Any ideas or comments to ease my worries?

 

You should be fine.

 

well seeing that many coopers have 17 inch wheels of that size with no issues of rubbing, you should be fine.

 

Pick a different tire, you can do better.

S.Drive is a new Yokohama tire but not their best model.
Look up the tire review in a recent issue of Evo Magazine.

Search for other tires in that size.

Quiet and smooth riding has to do with which tire you choose and what size not the size of the rims- 16" vs 17"

You can get a harsher ride with 17" if you choose a firm riding lower sidewall tire.

For smoothest ride owners often choose 16x7 rims (+42 to 45mm offset) and non runflat 205/50-16 tires.