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This is quite a colorful discussion with some good and other parts not so good. A fresh perspective may help.
Since I recently had an M-Performance differential installed, I though that I would chime in with some initial impressions. My car also has Dinan springs/bump stops/adaptive damper tuning. I think that this collectively tuned solution is close enough to coil-overs for discussion purposes here.
My car also was ordered with the track and handling package. The stock suspension is the weakest point of the car. I found it to be simultaneously under-sprung and under-damped. Comfort mode was the most egregious. Excessive dive/squat under braking/acceleration as well as body roll during cornering were evident. The excessive softness also degraded perceived predictability. I could feel the car load and unload wheels in spirited driving, loosing mechanical grip. I suspect that the very progressive rate of the springs are the biggest issue here.
Another big gripe of mine is that the car does not put the power down effectively/efficiently. Very careful/timid throttle application on the street was how I dealt with this. The large torque of the B58 is both a blessing and curse here.
Shockware came first. This is a +15% damping rate increase in each mode roughly. Secondary motions were removed. (overshoot and ringing after a bump) A slight improvement in the faults above was observed. A band-aid really.
Matched springs and bump stops came next. This was truly transformative. All controls from driver inputs became much more linear/predictable. Mechanical grip was noticeably better as the tires' available grip was actually used since the tires followed the road much better. Moreover, the car put power down better accelerating. The ride is still very comfortable. Passengers do not know that the suspension is not stock.
Finally, the M-Performance LSD came last. It really helps put the power down predictably. This is most noticeable in tight corners. No surprise here. What is left out of the everyday usefulness is that every single right/left turn to merge into traffic is clearly improved in both dry and wet. Those that say an LSD is wasted outside of a track event is not something I agree with. The net effect is improve linearity in the car behavior and higher driver confidence. I smile much more driving the car now. It was worth the $2600. Traction control still cuts power, but the intervention point is much higher and forward momentum is maintained. All chirping of the inside (right usually) wheel is gone. The throttle is now a much more predictable tool. Now I finally understand why RWD cars are revered for their driving dynamics.
After all that background, the suspension change was definitely more transformative. My vote is to do that first. Without the suspension improvements, my car would have been sold and replaced with something else. In retrospect, I should have just gotten and M3 instead since all the issues that I fixed are addressed stock there. My 340i is everything I hoped for now without an F80 M3's burden of way too much power for the street. (my opinion of course)
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