I also used a medium case diff donated from a 325is...the small case isn't as durable. It's a straight swap, but finding something as high as a 4.10 would be difficult (I think only >88 auto 'verts had them). I used a 3.73 and IMHO it's an improvement over the 4.10.
When I bought mine the input seal failed, ruining the input shaft bearing. I pretty sure that grinding diff was the reason he decided to sell it. I might have been able to rebuild it, but decided to replace it instead.
From the PO's records my car is on her third rear-end. I'm hoping the heavier medium case lasts longer. I pulled it from a car with 167K miles and I've put 20K on it since, no problems yet.