who cares what the exhaust sounds like when it's induction sings like a bitch when you stamp on the loud pedal.

oh and.. the 328i vs M3 comment... i mean... really ? i had an E36 328i and attempted to play with an E46 M3 (consider the E36 is a fair wack lighter than the E46) and it quite happily fucked off down the road. pretty sure the 330ci wouldn't stand a chance either, and that has another 40 hp on top of the 328i..

On the flip side of the coin though... have you considered one of THESE 300i'sh hp.. Turbo upgrades fairly easy (probably expensive)

E46 M3 is what... 340hp? but the age of it means it probably isn't making that any more, you have to pay 'm tax' as it's so lovingly called on everything, the servicing is a shit load dearer too