3.46 Differential swap - 3-400 dollars - This alone makes you as fast as a manual 328 once you get used to the quicker shifting. Poor man's turbo..
Slap on intake, exhaust, chip, maybe some other minor things like a underdrive pulley kit, and yes you are as fast or faster than a 330 (manual even) in a 323/325, for approx $2k or so.
You guys bashing what a 325 can do, must forget that a 330 is only a half second faster in the 0-60 than a 'poor' 325. As stands, I'm as fast as a manual 330 and I haven't even done a pulley change - just the 'common 3' and the diff swap. Consistantly pace or outdistance 330's now. (If it's auto I leave it like a 328)
The ZHP has 10hp on a 330, it's not like it's a leaps and bounds difference, 'maybe' 1 carlength in the 0-60.. The gearing difference is the single biggest 'advantage' to the ZHP, and this can be accomplished in the 323/325 to a greater degree with the simple diff swap I mentioned above. I've run with a stock ZHP (manual) and by the time we reach 100, he's only about 1-1/2 carlengths on me - nothing to go gaga about.
All that said if you've got the wad in your pocket and 'want' to build a fast BMW, start with the 330 platform, you 'might' get it as fast as a e36 M3 w/o going FI.
Go FI, and you'll eat 330's for lunch and cause E36 M3 owners to wonder if their car is falling apart..