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One doesn't really replace the other. If you are going to invest $3000 in an LSD you should be ready to invest the money in a capable set of shoes to get the most out of it.
If you plan on selling the car just keep in mind that the LSD will not net you nearly the % in resale a set of wheels would. Also note that you can't really buy the MPerf LSD anymore so your only options are WaveTrac or Quaife. Both of these require you to send in your pumpkin for splitting the ring gear and installing the LSD. The turnaround time for this service is 3-4 weeks. I have gotten quotes on both applications through different partner shops, all were $3-3300.
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328i RWD | MW on CRed Slick Top | 6MT | BM3 | MPE | GPlus FMIC | CSF Radiator | Millway Street Camber Plates & Monoballs | KW V2 6k/18k Swift Springs | F80 LCA/TS | SPL Bump Steer Kit | APEX SM-10 | R-S4 | DS2500 | RBF600 | SS Lines | Past: E36 328is & E38 740i |