If price is an issue, then don't hesitate to choose the 325i. For nearly $7,000 less, you get an outstanding sports sedan. You may never miss the extra power of the 330i, and you certainly won't miss the increase in monthly payments. The 2.5-liter engine doesn't develop the urgent thrust of the 3.0-liter. But there's plenty of power here, and it's delivered smooth and linearly with no significant dead spots or rushes. Just strong, gradual propulsion. It's so smooth, that it's easy to rev past the redline to where the rev limiter cuts back on the throttle. BMW's Double VANOS variable-valve timing helps both engines provide plenty of torque (the force that makes a car jump when you hit the gas) throughout the rev range.

The 330i's 3.0-liter engine delivers more gusto at the top of the rev range, yet is surprisingly strong at lower engine speeds, too. BMW claims a 0-60 mph time of 6.4 seconds, versus 7.1 seconds for the 325i. Both top out at an electronically limited 128 mph.

BMW uses inline six-cylinder engines instead of V6 designs. Though it takes up more space, an inline-6 is considered to be inherently smoother by design than a V6. Indeed, BMW believes that six pistons lined up in a row run more smoothly than two banks of three pistons arranged in a V. Both 3 Series inline-6s feature fully electronic throttle control, variable valve timing, and a dual-resonance intake system. The throttle feels light and linear, perhaps because of the electronic throttle control.

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. Last year, BMW switched shifting directions: Now, tip the shift lever forward to downshift, pull it rearward to upshift. Steptronic can be useful and entertaining. But the real benefit 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.

M3 models offer a Sequential Manual Gearbox that you'll either love or hate. At first, I hated it, but after a few days I loved it. It's important to understand this is not an automatic transmission per se. If you want a smooth-shifting automatic, this isn't it. While the Steptronic is an automatic with a manual feature, the SMG is a manual with an automatic feature. Like a Formula 1 car or a Ferrari 360 Modena, the SMG has a clutch, but no clutch pedal. In automatic mode, it shifts like some robot is working the clutch for you. When I first climbed into the M3, it was set in the slow mode, which, to me, feels like someone who hasn't mastered smoothly coordinating the gas and clutch pedals: the car slows down, the shift is made, and the gas comes back on. Dial this up to the fastest setting and it shifts quickly and abruptly, more like an F1 machine. Advanced engine electronics interrupt the engine?s power for just milliseconds, the control unit opens and closes the clutch, and changes gears electro-hydraulically. You can also set it for manual shifting. The sequential gearbox is operated either by the shift lever or with butterfly paddles on the steering wheel (one to upshift, one to downshift). The stick has a great feel and it responds like a manual with similar or better performance. Downshifting is really cool as it blips the engine, double-clutching to change down. Switching between manual and automatic modes is quick and easy once you get the hang of it. If there's a better sport coupe than the M3 with the SMG, I don't know what it is.

The 3 Series cars are extremely stable at speed. I found it difficult to obey the 55 mph speed limit while driving a 325i sedan around Washington's Capitol Beltway, and impossible to stay within the law on Maryland's back roads. The 330i is so smooth and stable that I needed to trail-brake the first time I came into a favorite sweeping turn, realizing that I was coming into it a little hotter than usual. The M3 is very taut.

The suspension is tight, making the 3 Series cars feel like fine machinery. A 330i sedan driven back to back with an Acura TL Type-S immediately showed how vastly more sophisticated the BMW suspension felt. These cars put 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. Even the M3 offers a comfortable ride.

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 luxury sedans, the BMW provides good feedback, though the steering feels surprisingly light. These cars handle curves with aplomb, gripping tenaciously during aggressive cornering maneuvers. When the tires finally let go, the resulting slide is still fairly easy to control; it requires a bit more skill than in a front-wheel-drive car, but at the same time allows the driver more control. The M3 generates incredible grip, more than a Porsche 911.

Brakes are even more important to going fast than horsepower, and the 3 Series provides excellent stopping power. Parking a 330i next to an Acura TL Type-S provided a striking comparison: Massive rear discs seen through the spokes of the BMW wheels dwarfed the rear discs on the Acura. On a familiar twisting, bumpy, gnarly road, I slammed on the brakes both in a straight line and while turning, the latter a driving faux pas. Either way, the 3 Series sedan 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. Clearly, however, rear-wheel drive offers benefits even at a modest pace. The steering, handling and general feel is noticeably different even when driving around the block. Bottom line: the BMW feels much more sophisticated than front-drive sedans from Japan that are asking the front wheels to do two jobs at the same time.

All 3 Series models come with Dynamic Stability Control, which enhances driver control and safety in emergency maneuvers. 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 the throttle 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, if you want to light up the rear wheels, for example. By pressing the DSC button briefly, the engine intervention feature is turned off, leaving only brake intervention functional at low speeds; as speed increases, however, the engine intervention gradually comes into play. Hold the DSC button down and it shuts off everything except anti-lock braking.

The 325xi sport wagon we drove felt like it was on rails on dry pavement. The all-wheel-drive system on 325xi and 330xi models uses a planetary center differential to split drive torque 38/62 percent front/rear, preserving the rear-wheel-drive feel that BMW enthusiasts demand. All-Season Traction Control (AST) and a specially calibrated version of BMW's Dynamic Stability Control (DSC-X) enhance foul-weather safety.

Hill Descent Control, which comes standard on 325xi and 330xi models, helps the driver maintain speed and stability on steep downhill runs. The driver need only press a dedicated HDC button on the console to activate it; Hill Descent Control then takes over, gently applying the brakes as necessary to help keep the speed to a brisk walking pace. Just keep your feet off the pedals and let it walk you down the grade.