I bought an 1998 e36 318is two years ago and have enjoyed every day with it. I'd read about the slightly sluggish power, and just kind of accepted it, but then replaced a slightly faulty camshaft sensor and have been very pleasantly surprised since. It drives best at higher revs and is very "peppy" around the 2500-4000 range.
It's my daily driver and I couldn't ask for a better combination of economic fuel consumption and style. It's a good looking car, with the full M-Tech kit. I haven't added any extras to the engine, but it's only had one other owner who kept perfect logs (bless him) and runs silky smooth, even 9 years on. Give it a good polish and you'd be proud to take your girlfriend(s) anywhere in it.
My only gripe would be that it can be loud running at the higher revs, but the experience is worth it. Don't usually notice this since my day to day driving is much more relaxed. It has a slightly bung drivers side window that doesn't go all the way up by itslef (needs a second upwards click) but seriously, that's about it.
Wouldn't mind trying an e30 318is to compare and see what the fuss is all about. :)
To follow on; I have an E30 318is, for 7 years now, and have posted a review elsewhere on this site (1990 318is). Now done 194k and still going well. Handling, brakes and throttle response quite superb. With good tyres it's unbelievably well balanced. I drive in the twisties every day and generally drive quicker than everybody else, and it really is rewarding to drive, very confidence inspiring. Unlike my Mk1 Golf GTI, which I always think will bung me in the hedge either forwards or backwards at any moment...
Handling is the best bit - I had a 944 S2 and sold it to keep the Beemer, as it is a better balanced and more fun car. And if you buzz it, it's plenty quick enough to keep you entertained and the wrong side of our silly road laws. Highly recommended.
Only trouble is, mine's a bit rusty now here and there, and I'm considering an E36 or E46 318ti, but am not convinced...