The I6 S54 motor is highly tuned from the factory at NA 333hp and basic exhaust/intake/chip/etc cannot get much more out of an already well engineered setup. The basics can get you mabye 20 WHP and that doing it with good parts will probably be $4000+. Still most likely going to be below 300whp I think.

Add FI into the mix and you can get good HP out of the motor on stock internals with a SC bolt on kit (the two cars previously mentioned I believe are 500+ WHP). The S54 has an 11.5:1 compression ratio, which from my limited experience is pretty high and doesnt lend itself well to FI.

A company in California "Horsepowerfreaks" is working on a turbo kit for the E46 M3. They claim that the hardware side of things is done and it all comes down to the software tune, which apparently is a bitch with these cars. If they follow through and actually get their kit completed, my guess is you will probably see see sub-11sec e46 m3s shortly after the kit's release.

If Tazam3 can get to a good track and get some good runs in, he may get into the 10s but should at the least be into the low 11 range.

Another factor is weight -- the M3 is still a luxury car despite it's racing heritage -- an m3 coupe is 3400lbs, add a few options and you're close to 3500. Weight of a vert? forget about it heh. The E46 M3 can lose a good bit of weight but it is costly -- carbon fiber trunklid/hood/bumpers, racing seats/lightweight battery/aftermarket exhaust and headers/lightweight wheels. Doing all that properly could probably run you 20k if not more but you'll probably be in the 2900lb range (just a guess there). There are guys who go all out and remove the rear seats, but when you're going that far you may as well have gone with a Z06 if you are willing to lose the benefits of being able to comfortably seat 4 adults in a nice interior.