I had the "fake" stuff in my 98 323is, and the real deal in my 2001 325i. I personally like the real leather. The fake stuff will be more durable in certain situations. If you plan on going skiing, or getting the seats dirty a lot (kids) you may be happier with the leatherette. I've found the true leather to be more comforatable when it gets cooler, the leather will warm up easier than the plastic, especially with the heated seats...
My two cents, if you're buying the car new, go for the leather, it's a real classy way to go...My car is sienna red with black leather, the premium package adds the wood trim so the car looks fantastic. Good luck....
Josh