I bought a 4-year extended warranty for the wheels/tires of the car. When BMW sent out a "service bulletin" (a fancy way to say "recall") on the tires about a year later, they didn't honor the extended warranty, which defeats the purpose of getting a warranty. I wrote all about it here: http://www.subtleimages.com/blog/2007/10/10/i-bought-a-bmw-for-this/
The onboard computer is also very finicky, I have had brought this to BMW service at least three times because it just won't start with a "red steering wheel lock" on the dashboard. Sad to say but this is NOT an isolated problem (http://forums.bimmerforums.com/forum/showthread.php?t=1038819). My dealer's service center is not a pain to deal with (so far) but they could not explain why it is happening; they would just "reset" the computer hoping it would be OK.
I am getting rid of this car, not because it doesn't perform as advertised, but the reliability is questionable. It almost feels like that once the 4-year warranty expires, the headaches will start pouring in.
BMW USA is also not very helpful. If you read through my blog about the pains I've gone through to own this beautiful machine, one would wonder how the company can survive with such arrogance.
Drives and handles like a dream. BMW designed the AWD in such a way that handling is not compromised. One should really get this car with a MANUAL TRANSMISSION, otherwise you will not going to get its full potential... and to be honest, the AT is very sluggish (this from driving the "loaner cars" when my car is in service).
The cabin design is OK but not GREAT. It's quite apparent that BMW had to cut corners for more profit margin (this is compared to the previous generation E46?)... oh I said "more profit margin" because the 3-series hasn't gone cheaper. ;-)
I know the new styling is love-it-or-hate-it... but I personally love the new design, it's an evolution in the right direction... that said, the designer (Chris Bangle) probably took his unique design a bit too far for the other models (the Z series is kinda over-the-top)
But, alas, having all that said ... it's not enough reason for me to keep the car... I believe owning the Ultimate Driving Machine need not suffer such compromise.
Buy an e46, or a well maintained e36, you'll be pleased.