I've not done it yet, so someone can correct me if I'm wrong, but you basically need to source an M20 single mass flywheel, clutch and pressure plate(not sure if you need the Throw out bearing)
Once you have these, you then have two options to match up with the starter: either purchase the correct starter gear to match the M20 flywheel or you can have the ring gear removed from the M42 flywheel and mated to the M20 flywheel (Metric Mechanic can do this for you) If you go the Metric Mechanic route, which I will most likely do, they will machine some of the excess weight from the single mass flywheel (I believe down to 11 lbs).
Of course, I didn't research this issue for my '91 318iC before removing and replacing just about all of the suspension and driveline components. So now I have my dual mass flywheel, along with a new clutch. Of course, I have bigger issues to tackle at the moment (spun a crank bearing and rod bearing..:eek:, so I'm rebuilding it....)
Good Luck with your decision on this. And, BTW, welcome to the M42 club. You've definitely found the right spot for your car.
P.S. Where are you located?