I've been driving with a 3.64 since last summer I would never go back. It doesn't ruin the car. If anything it makes it that much more fun to drive because you can beat on it for longer in first and second gear without having to shift all the time. You won't notice a drop in acceleration but you will be able to run second gear all the way to 63mph vs 55mph with 4.1. Driving on the freeway is much easier on the ears and you pick up a couple of MPGs. I'm keeping my eye out for a 3.64 lsd now. I think BMW intentionally hampered the car from the factory with the 4.1 in order to differentiate it more from the 6 cyl and justify the price difference. Nothing makes a car look slow on paper like a 2->3 shift before 60mph.
Yeah, exactly! I was thinking that first gear is so short. And then at highway speeds the engine rev's keep making me try to shift from 4th to 5th, only to discover I'm already in 5th.
Did you do the lighter flywheel conversion on your car? I was thinking I might not need that, since the longer 1st gear might be enough. (The flywheel conversion makes 1st gear more peppy).
What car did your diff come off of? I'd be going with an LSD for sure. Have you checked into which models with 3.64 LSD fit the 318is?