I have an 04' S4 and enjoy it a lot........I like the look of the 335i better but you are right- the 335 sedan sound is tame compared to that V8 rumble(even compared to the E92 coupe) and the interior qual doesn't match up.....
That being said I have to say there is a 3rd option.......
The new B8 S4..........
Rumor has it the next gen Audi A4 will be at Geneva next year and if my guess is right the new S4 will show at the same time just like the A5/S5 were....... possible deliveries commencing Fall of 08'.......
Price well loaded will probably be 58-60K. Course it won't be an M3 but a well loaded E92 M3 will prob be closer to 70k than 60k. And if price is an issue then...................
Either way you slice it they'll both be sweeeeeet....