all the hooplah about poor filtration aside, when we dynoed a stock 328i at bpg before and after K&N was installed, the K&N consistently lost 3 hprsepower and 4 lb-ft of torque. the torque curve was also more jagged, which leads me to believe it has to do with the turbulence of the intake charge as it exits the filter and passes through the HFM. the OEM filter has a thin sheet of foam to smooth out the change post-filter. if you have an E46, don't K&N.