I chose a 335i over an A3 S-Line in the fall of '06. The A3 felt good to sit in, but driving it was just oooookay -- competent, but I didn't flip for it. I was seriously considering it over the Z4 coupe just because of the practicality.
Luckily the BMW dealership got some 335s in while I was still debating. After a very short drive there was just no contest. It annihilated all the other cars I drove, at the price premium that would suggest.
If you can live with the handling of an Audi or Infiniti, then go for it. You'll probably wind up with an extra 10 Gs in your pocket for hookers and blow