Whatever mods you do to your motor, you still need decent sound while you are driving with your honey. The poor BMW stock amp is fine for everything *except* the low lows...You are going to need an external subwoofer. Like I suggested, the problem to get balanced sound in BMWs (balanced = balanced, not Bazooka-like weaponry) is almost stictly in the domain of the low-end. Just go to eBay and search on BassLink. Not only will you find BassLink subwoofers under $200, you will also find BMW-specific install kits. The $250 or so you spend on the upgrade will likely become the most memorable $250 you will *ever* spend on your Bimmer. As for your motor/suspension upgrades, don't force too much down the throat of your 325 - get an M.
You can read a post/article at:
http://www.wakajawaka.org/bmw-audio-upgrade/
or just go to eBay and do an eBay search on BassLink.