After much study, listening to posts on this board and consultation with my mechanic about the options to improve stock handling (specifically turn-in and roll characteristics) I replaced the OEM springs and shocks with Eibach springs and Koni adjustible shocks & struts ($1250 parts and labor).
As with most suspension work, the results are a compromise, but overall I'm very satisfied. First the compromise-even though the front shocks are set to the softest setting and rears only 1/2 a turn to firm, the stiffer spring rates do make for a harsher ride, especially over uneven, rough roads. If you think YOUR Z3 squeaks and rattles a bit, you ain't seen nothing! For roads in good shape and freeways, ride is basically unaffected.
Now for the good part- handling is AWESOME- as good or better than a ///MZ3-like riding on rails. Turn-in is impressive and roll is negligible. The springs lowered the car about 28mm rear and 23mm front- eliminating most of the wheel wheel gap (especially the large gap at the rear), while still allowing enough clearance to handle bumps on 17" wheels.
Post upgrade, the car did need a good 4 wheel alignment. The alignment set toe-in, caster/camber to within spec for all but the front left wheel (<1 degree off camber). My mechanic feels this is not significant enough of a difference to worry about. Any comments here?
I know many of you have invested in larger sway bars for your Z. I was considering these also until my mechanic (who races BMWs) dissuaded me. He said shocks/springs would be a better choice for street use because larger, stiffer sway bars can cause very adverse handling in wet conditions-something about reducing the independance of the suspension which can affect traction. For track use he recommends them , but has actually disconnected them on his race cars when faced with inclement weather.
If you (and your passengers) can deal with a stiffer ride, I heartedly endorse the suspension upgrade.