The old saying, "there's no replacement for displacement" holds generally true as the Infiniti G35 and Lexus IS350 both have 3.5L engines. QUOTE]
Isn't that the truth.
The E46M3 engine has had bearing issues throughout it's history. Infact BMW issued various recalls to address this issue as well as extended the warranty on the engines.
On that note, there are many more E46M3's that haven't had a problem and some of those are tracked regularly.
I've heard all sorts of things about the S54 engine: Weak rev limiter, valve impressions on the cylinder heads on SMG cars, repeated spun bearings on some engines, BMW initially not wanting to honor blown engines that HAD the recall bearing work done. The S54 engine isn't one I'd want in my BMW, if I was planning to own it past warranty.
Another thing. BMW goes to great lengths to keep a previous model from becoming obsolete. IMO they do this because #1 they don't want to piss off current model owners (Imagine buying a '05 E46M3 only to find out in 1 yr a E90 Coupe will arrive on shores sporting the same HP as your $50K+ automobile). #2 BMW has considerable exposure on the leasing side. They still want to be able to sell all those M3's coming off lease without having to resort to steep discounts.
The E46ZHP is a perfect example. The ZHP has almost the same HP as the E36M3. BMW offerred the ZHP in Spring of 2003, and that was 4yrs into the life cycle of the E46. Perfect timing to keep E36M3's owners from feeling slighted, and all those E36M3's had probably washed out of the lease program by then.
Just my $.02