Talke a look at the 0-60 and quarter mile times. The 325 guys love to claim they are faster, but in all honesty, the amount is not all that much. Their problem stems from using the Butt Dyno and not knowing how to properly drive our cars.
They get in, sit down, and hit the gas like a 325. They tend to drive at a range below our power band, so of course it feels sluggish. The 318 is about revs, the 325 is about low end power. You have to drive them for the power band they have, which means driving a 318 like you literally stole it. They do not do that and are often worried about what the owner will say. They avoid redline, we live there.
As for what is better, we have less maintenance, higher mileage, slightly better handling.
They have a few more power mods and slightly better acceleration.
Put both on a track and in many cases the 318 will beat the 325 and flat out destroy much more expensive and newer cars.
As for which is better, that is personal opinion.
I have met a few guys who have had both, and while they love the 325's power, especially after modding, all said they longed for the 318 handling and often wish they had kept it. The ones who could afford a Metric Mechanic engine (yes there are a few out here) all wished they had the 318IS with a Metric m42 instead of the Metric M20 as it is a better combo.
Again, all personal preference though. The problem is most people have only driven one of the 2, those who have driven both do not drive both properly so the 318 gets a bad rap.
Personal opinion... I love the 318 better. You can only go so fast on the street anyhow and I prefer the less maintenance and better mileage. In my opinion the M42 offers the best dual purpose, great street handling and mileage, coupled with great spirited driving when you want it. Is it the fastest thing out there? No, but it is plenty fast when you start hitting the corners.