OK I'm back and with the news everyone has been waiting for!
How to upgrade your 323i to a 325i and not void your warranty for only $1300AUD (of which i think the mechanic makes neaerly 100% of that in profit) All they need to do is reprogram the engine management system with the 325i engine settings.
It makes sense, as why would BMW spend piles of money on changing the engine when they can control it with the computer. It is also evident when you option a 323i up to the equivalent base 325i the prices are nearly identical!
BMW 325Ci MY2004 Individual //M Clubsport Edition, //M Clubsport package, //M Sport 18"s, Manual //M Short Shift, Carbon Black, Black Aluminium Cube Interior.