It always comes down to preferences. Practicality-wise, the M3 wins hands down. However, if you're looking for practicality, wait for the new CTS-V, then compare it to the M3.
Personally, I think that vs the M3, I think Z06 is a bit of overkill. I think a '08 Corvette Z51 would easily provide just as many thrills, with a slightly more livable ride if it's to be a daily driver.
For me, it's a hard choice. I love the looks of the M3 Coupe, and the DCT looks ace. However, if I want to flatter my ego, I'd go for the Corvette, because nothing turns heads more this side of a Viper.
My personal bias is the engine--the BMW's V8 is a marvelous engine, but even it can't replicate the V8 burble of a Chevy smallblock. Add to the fact that it's easily the most modable V8 on the planet, breaks the tie for me.
Obviously though, if I had it my way, I'd buy both