I just completed this swap and have a few points to add. 
My parts list first off:
PnP M20 17 lb flywheel and short bolts $20
Late M20 starter. $20
Nearly-new Sachs M20 clutch Assy $30 shipped (thank you R3v)
Surface/balance/lighten. Around $200. Ended up around 12.5 lbs. I'd guess 11 would be perfect. There is NO loss in drive ability with 12.5. My wife could drive it and never stall, with the a/c on!
Euro 323i T/O bearing $63 on Bav auto. 
Otherwise it was a straight bolt in, no shim used. The 6 cyl starter spins way faster too. 
A few myths dispelled. The ring gears will not directly swap without machining as they are different internal diameters. and since the starter falls out when the trans is out, installing an M20 version seems to be the easiest route. The shim behind the flywheel isn't needed as long as it's been lightened.