I like them both. The torque of the M20 and the peakiness of the M42. It's Bavarian Motor Works after all...they're really serious about good engines.
On the M20 side the the valve adjustments and timing belt changes are a PITA. But, no worries about cam chain/tensioners/guides, profile gaskets and leaky radiators. And the baby six is so deliciously smooth.
On the M42 side you get less weight and it's all further back, better flow through the head, far better fuel economy and even some cam timing magic on the later models. On the downside...oil leaks like nobody's business, ridiculous prices for motor mounts, buzzier car, transmission is less durable, the diff is undersized. I'd like an oil cooler too, but that's quite a bit more difficult than the bolt-on M20 version.
Speaking of swaps, who's going to be the first to put a newer (like post-1993) BMW engine in an e30? The N52, N54 & N55 look very promising, don't they?
Six of one, half-dozen of another...