For a real kick in the pants, the 3.0-liter delivers more gusto at the top of the rev range, yet is surprisingly strong at lower engine speeds, too. BMW claims a 0-60mph time of 6.4 seconds, vs. 7.1 for the 325i. Both models top out at an electronically limited 128 mph.

Changing gears with the five-speed manual gearbox is a smooth, satisfying operation. The shifter uses longer throws than in a sports car, but it's a precise movement befitting a world-class sports sedan.

The automatic transmission works superbly, always keeping the engine in the optimal power range. All automatics are five-speed Steptronics. Pulling the lever to the left allows auto-manual downshifting and upshifting. This can be useful and entertaining in stop-and-go traffic. But the real feature of these transmissions is how well they work in the automatic mode. Shifting is smooth and precise and the driver almost always feels the transmission is working as part of the team, rather than fighting against driver and engine.

At highway speeds, the 325i is extremely stable. I found it difficult to obey the 55mph speed limit around Washington's Capitol Beltway, and impossible to stay within the law on Maryland's back roads. The suspension is tight, feeling like fine machinery. The 325i isn't as quiet, nor does it ride as smoothly as the best luxury sedans from Japan, but this is by design. Instead, the 3 Series puts the driver in touch with the road. You hear and feel what's going on, though the outside world is muted well enough to ensure comfort. It's a balance that BMW masters. The stiff chassis structure allows the suspension to dampen irritating road vibration, reducing the chance of squeaks and rattles.

Steering response is more like that of a sports car than a luxury sedan. There's little play in the steering and the feeling is one of directness. This car goes exactly where you point it. Unlike the over-boosted power steering found on many other luxury sedans, the BMW's steering provides a real feel of the road. This car handles curves with aplomb, gripping through aggressive cornering maneuvers. When the tires finally let go, the resulting slide is still fairly easy to control, though it requires a bit more skill than in a front-wheel-drive car.

Brakes are even more important to going fast than horsepower, and the 3 Series provides excellent stopping power. On a familiar twisting, bumpy, gnarly road, I slammed on the brakes both in a straight line and while turning, the latter a real no-no. Either way, the 323i brought me to a quick, uneventful stop. The anti-lock braking system was hardly needed on the dry pavement because the tires offer good grip and the suspension does its job, keeping the car stable and minimizing nosedive, so that the rear tires can contribute to the effort. As a result, this car stops very quickly, and it's easy to control in a panic braking situation.

While front-wheel drive has its merits, pure race cars use rear-wheel drive. Enthusiasts prefer rear-wheel drive because they can actually steer the car with throttle inputs. The payback for this added element of control can be a skittish rear end, particularly on slick surfaces, a condition known as oversteer.

All 3 Series models come with BMW's Dynamic Stability Control. BMW positions this technology for its safety benefits: DSC helps stabilize the vehicle in severe cornering maneuvers by judiciously applying the brakes to individual wheels. In other words, it helps the driver maintain control when the tires lose grip. This can save your life by helping you keep the car on the road; just remember to point the steering wheel in the direction you want to go. But DSC also enhances handling on winding roads, smoothing out minor errors, making adjustments when you hit a patch of sand in the middle of a tight corner. The system kicked in for me in one tight corner, while I kept my foot to the floor. The rear tires lost grip, but DSC expertly reduced throttle and applied a little braking force to one of the front wheels; the chassis changed its set subtly and off I went again. This is extremely beneficial on a rear-drive car in slippery conditions, but it's also useful on dry pavement. A switch allows the driver to turn DSC off when it isn't wanted, in actual racing, for example.

The 325xi sport wagon we drove came with all-wheel drive. The car felt like it was on rails on dry pavement. The only way we could tell we weren't driving the sedan was to glance into the rear view mirror. It's taut.