We have a e30 318 that is was raced twice last year with decent results from a 130k mile motor...

In terms of go-fast goodies a lot of stuff from the m50s and euro s50s swaps in however it is all illegal stuff... (i.e. solid lifters valve train goodies pistons rods, and cranks from diesel 320s yeild a 2.1 displacement i believe)

BMW did race these in e36 320 touring cars in the early 90s after the s14 m3 engine was no longer. They were getting around 320hp or something to that tune but everything was obviously bmw backed...

Go fast goodies I think will come in the form of one off pieces as well as proper FI tuning... I know of cars with simple readily available bolt ons putting down well above BMWs listed hp rating...

for the serp belt cars, underdrive pulleys are available, for the vbelt cars a custom set must be made... Cam timing is adjustable and can produce some power with intake adjustments...

other than that getting the chassis right and suspension components to the extent of IT rules is where your time should be spent.