Solely just more engine power (and 500cc more) means almost nothing. A true tuner version of BMW or Benz such as M and AMG are very exclusive design sports cars to meet VERY DEMANDING customers. This means, chasis, suspension, brakes are all 'tuned' to leverage every bit of the engine power. Yes, some fanatics always think they can (do a better job) mod the 335i 's ECU, suspension..etc to peform as 'close' to a M; that satisfies some people who probably know what they are doing but that may still not satisfy the true M fans. Besides, engine mod is illegal in some countries and bounded to lose your car's warranty. If you don't take more passengers or climbing up hills on a regular basis, the 330i performance is a perfect specification which meets the minimal fun factor yet enjoying better fuel economy. 300hp is A LOT if it was THREE YEARS ago. But, we talking about now 2006, even a Benz W221 S500 (388hp) can do a straight 0-100 in 5.4s, not to say M3 E90, RS4 are already in the 4.X secs range. So, 335i is not so much a 'faster car'. Thus, there is also less reason to get a 335i for drag race unless always with your friend's IS300.
At any extra costs and indefinite wait time, I would not crazy about a 335i if there exists an M3 E90. Not want to pay any more extra for the M3 is just not enough to be an excuse. If money is that short, I would get a 120i/323i, drive it for 2 years and save up for the M3.
