I meant to load progress as it happened, but realized I was better off spending my free time working on the project rather than writing about it.
I replaced my dash, deleted all the airbag stuff, installed Mark D 91 chip, cruise control, fully functional 13 Button OBC, maplight mirror, recovered rear deck, installed BMW premium sound and stock headunit Alpine CM 5908, new set of used door panels, upgraded to a leather Mtech II steering wheel, ZHP weighted shift knob, leather shift and ebrake boots, leather ebrake handle, custom floor mats, replaced carpet. Damn that's a big list! I also just replaced my windshield wiper motor.
On to the pictures:
Old interior Nasty carpet - in addition to the garbage you see here there were 20oz bottles of tobacco spit. Cracked dashboard with a sticky pool of coins and spilled soda. Crazy wires hanging out of the empty radio slot, phantom central locking, lumpy door panels, wrecked center console. Definitely needed some work.

Old cracked dashboard and molested stereo

Old dash removed

Wiring mess beneath the dashboard I cleaned this all up by wrapping the wiring harnesses up with hockey tape - it has the same sticky cloth texture as the stock wire wrap. The car came with an aftermarket Alpine alarm system with remote keychain. I found the installation and owners manuals online in pdf format so was able to check the installation. I ended up repairing a few solders and rerouting the original choice of grounds. I reprogrammed the unit and got rid of the annoying lock-doors-after-10-seconds-of-driving function. But I had the siren/horn working and now it doesn't so I'll need to recheck that part of the wiring. Its a pretty cool basic alarm/keyless entry. I think it was a popular dealership install since I have seen quite a few other people with the tell-tale red LED on a switch blank.
Doing some electrical testing. You can see the goods I've installed - stock radio, cruise and 13 button OBC. Also I deleted all the airbag components and wiring and wired in the stock BMW Premium Sound system.
New dashboard installed

Rust free floor!

Old Carpet

New carpet I tried removing and power-washing my old carpet but it didn't come out as clean as I'd liked. It wasn't total shit so I just swapped it out with the nicer one from my 86 325es.
Bavarian Autosport custom floormats and Airbag Dash Panel I had some custom "318is" floormats made from BavAuto. I think I used charcoal fabric and silver block stitching. The charcoal matches the carpet color better than black. Also I initially reinstalled the old drivers side knee panel that is beefier for some reason on the airbag equipped models.
New dash with Non-Airbag Dash Panel and Center Console The non-airbag underdash panel has a larger cutout for the steering column since the airbag columns have a different angle. I filled the gap with single-sided sticky foam (aka topper tape). Actually I used a lot of that foam to reduce and squeaks and rattles from the dash. Also replaced the glove box door with a non dented one. New pedal pads.
Recovered rear deck and Premium Speakers I recovered the rear deck from a premium sound model with black felt from WalMart. Later found out that if you want to get serious, worlduph.com sells the actual deck fabric. Put in the rear speakers with tweeters that I bought from Nomad.
Rear deck again I'm really happy with the way it turned out.
Shifter and Center Console Installed the ZHP weighted leather shift knob and bought a leather shift boot from a member on R3v. I wanted a 2-button center console to get rid of the window lock switch. I consider it a useless function so just hid the switch beneath the console and deleted the button slot.
Leather emergency brake handle Bought a leather ebrake handle (e28? I can't remember) and a leather ebrake boot from members of r3v. The boot was a pair with the shift boot and both required reusing the trim rings. To me this looks a thousand times better than the stock plastic pieces.
Mtech II Steering Wheel The cherry on top is this steering wheel. Feels awesome. Only thing is that the leather color is more like Anthracite than black. I figure it will wear-to-match with age.
New controls Basically I replaced all the ways the driver interacts with the car. Has a much better feel than the crusty, rattly, dusty old interior.

New used set of door panels Have the dumb crank holes. Oh-well will do for now.
Maplight Mirror First one I bought had the wiring ripped in half and was irreparable. Bought 2 more from ebay and picked the best one. The spare I have didn't have the stablizing bar on the back so I'm not sure what model it is from.