I'm not sure about the particulars, but the BMW engines are all pretty similar. I'm sure you'll get much more qualified opinions on the board, but I'll bet it's pretty much a straight swap. Bell housings, clutches, engine mounts & wiring harnesses should be pretty close, if not functionally identical. Might be that the block is the same & you'd only need to swap the head, manifolds & DME.
You might want to go for a turbo kit or an M52 instead. It'll ultimately give you much more for your money. I'd just do a little tuning on it & go have some fun. That's what we're all about here...that light little engine in one of the world's all time great cars.
I was in the same boat as you, but now I'm just tweaking my M42 until I save up enough for an MZ3 or a 318ti (compact) Club Sport. I'd also kill for one of those little e30 estate wagons on my side of the pond! Maybe when they're 25 years old I can come over & get one...next few years...