the easiest way to get reliable horsepower is a chip, unless your engine is worn out it will still pass smog. The chips dont usually kick in till afte 2500rpm and thats all they rev the engine to for smog. drive the car for like a half hour before the test too, that helps. Cams are good for horsepower and it is an actual mod, it works all the time regardless. my buddy has a M3 with 2.5l with evo3 cams ( in cal ) and it passed smog 2wks ago. I had to have an intake fabricated, basically a aluminum plate with a 2 1/2 to 2in exhaust reducer with a K&n bolted to it ( made a heat shield out sheat metal ) the intake has to be taken off though to get it smogged becasue you are not allowed to haev an open intake.. As far as a booming exhuast, if you buy a decent quality high flow muffler, that is made to be quiet you will be okay ( wont make much of a difference though because of the cat ). If you do those for things you should get a realistic 15-20 hp at the rear wheels. If you want it to be quicker get a different ratio rear end (LSD) yours has a 4.10, go for a 4.27 or higher if you can find it (4.27 found in 318i (m42) 4-door automatics). this is everything I am going to do to my car for power as well. I have done the intake\exhaust so far, not a very noticable gain though. Mostly in your head as far as actual gains go.
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