I say the 3.91 LSD differential is the best upgrade for that car. I have the same car, installed the 3.91 LSD, and it brought the rpms up a bit, but nothing to run home crying about. It made the car have alot of get up and go for city driving and highway passing. I enjoy it a little too much as a matter of fact.
The 4.10 would be a bad idea, as you would rev way too high as compoared to the 3.64. It would be very unbenificial on that car for highway driving.
The 318i's final drive goes as this:
Final drive: 3.64:1 older than 11/83, and 3.91:1 newer than 11/83
the 3.91 was offered in the car, but only after a certain date.
Find you MFG date of the car with the sticker at the drivers side door.
Best way to find out how much you are losing by going to a lower differential is to follow this example:
Take your current gear ratio, and subtract it from the new ratio. Divide the difference by the original ratio and multiply the result by 100. This will give you your percentage change.
Example:
Current ratio 3.15
Desired ratio 3.46
3.46 - 3.15 = 0.31
0.31 / 3.15 = 0.098
0.098 x 100 = 9.80
Your difference is 9.8%. Now, you can take your current rpm at any given speed and add 9.8% to see your new engine speed. If you are currently turning 3000rpm at 70mph with a 3.15:1 differential, you will be turning 3294rpm with a 3.46:1 differential.
The major gain here is getting the engine into it's peak power band at a 10% lower lower road speed, which translates to faster acceleration.
I say thats the BEST way to decide what ratio in a differential you need.
If you are worried about topseed, you can follow this "theoretical topspeed calculation"
What is theoretical top speed?
Theoretical top speed is the mathematical calculation of maximum engine rpm, divided by the top gear ratio of the transmission, divided by the differential ratio, which gives the number of wheel rotations per minute. When you take the circumference of the wheel and divide it into a mile, you can determine the minutes taken to cover a mile, or, the miles per hour the vehicle will travel.
Example*:
Maximum engine rpm 7000
Top gear ratio 0.83:1
Differential ratio 3.15:1
Wheel circumference 80 inches
7000 / 0.83 = 8434 driveshaft revolutions per minute.
8434 / 3.15 = 2677 wheel revolutions per minute
Inches in one mile = 63,360
63,360 / 80 = 792 wheel revolutions per mile.
2677 / 792 = 3.38 miles per minute.
3.38 x 60 = 202.8 mph
Most vehicles are incapable of reaching their theoretical top speed, primarily from electronic vehicle speed limiters, but often also from aerodynamics.
*Numbers are for informational purposes only and do not represent any particular model. All figures are rounded to the nearest 100th.
The gear ratio for this car is as follows:
5-speed Getrag 240 (manual)
Ratios:1 (1/2/3/4/5/R): 3.72 / 2.02 / 1.32 / 1.00 / 0.81 / 3.45
I hope this help you out some. These examples were taken from:
http://www.koalamotorsport.com/services/bmw_differentials.htm
for your future reference.