With M3 prices dropping to near invoice now its making the decision tougher. Being so new in the market, the S4 will probably be going for just under MSRP for a little while just like the M3s did when they first came out. Now that the M3s are near invoice, the purchase price will be very close. In that case, I would say if you don't absolutely need the AWD, I would go with the M3. However, if the S4 was out when I was shopping for a car, I probably would have had a tough time choosing too. I loved my B5 S4. It did need a lot of maintenance once it hit 100k miles but that is true of any euro car. That's just something you live with when you own a euro car. BMWs aren't any different in that category. Just drive both and see which ones suits you better.
09 E90 M3 - Interlagos Blue / Black Novillo / Sycamore Anthracite / Eibach / HRE