Another great article on adjusting suspension: This is more specific for the E46 m3.
http://www.corsaracecar.co.uk/pdfs/suspensionSetUp.pdf
Also offers a "What to do in case your car does this" scenario.
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Car Under steers in corners
The most common complaint. Typically this means your front compression damping is
too stiff so soften these off a couple of clicks (1/4 turn) then try again. However if the
under steer is accompanied by excessive front body roll then try increasing front
compression damping. You can also try adjusting the rebound damping (harder if the car
is not rolling, softer if it is) but most of the time front end under steer is cured with
compression damping only (does depend on the car).
Car Over Steers in Corners
Normally this means that rear rebound damping is too soft and so needs to be firmed up
but if this is accompanied with excessive body roll then try also stiffening the rear
compression damping as well.
Car loses Grip coming out of Corners
Again a common complaint, especially with front engine/rear wheel drive cars like the
M3. Try softening the compression damping and firming up the rebound damping. Also
try lowering the rear tyre pressures.
At the end of this article we’ve attached an over steer/under steer flow diagram which has
been doing the rounds on the web for ages. I’d accredit who wrote it first as its very good
summary but in all honesty we’ve no idea who wrote it first? If anyone knows then we’d
love to credit them.