Alright, Alex (and anyone else who complains about dragracing BMWs), just stop complaining. Your opinion doesn't matter to the people who want to drag their cars. Sure, the cars weren't built for it, but what's the purpose of bickering and complaining about it? I, personally, am biased towards roadracing, but I'm not saying I won't go out to the dragstrip and take my (future) car on a run for fun. I sure won't modify my car towards a dragracing setup, but I'll take it out every so often for fun.
Secondly, if you want all that power, Vladimir, you're going to need to either have an S52 with every bolt-ons, custom tuning, a built engine w/ high-compression pistons, or an S52B32 (euro M3 3.2 motor) with some cams, high-comp pistons, and custom tuning. FYI, I've never seen a naturally-aspirated, street-driven, S52B32US-powered (S52B32US is the US-spec E36 M3 3.2) M3 with 300-350 RWHP. It's quite feasible, but there's a reason why nobody's done it: TOO MUCH MONEY! You could have much higher results resorting to forced induction (may it be a turbocharger or supercharger). That's your choice, though.
If you decide to go through with this, contact Alex McHenry at [emaill]mchewa0@wfu.edu[/email]. He is the son of Pete McHenry, one of (if not the) best BMW engine builders out there. Him and his dad will be able to help you out with your engine if you decide against going with a euro motor.
I barely know anything about nitrous. All I know is to NOT go with Zex (search for 'Zex' and username 'luckybmw'), and to go with Nitrous Express. If you want more information on nitrous, check out
DTM's forced induction forum or
Bimmerforums' forced induction forum (the latter being the more active).
And lastly, if you ever have questions about E36s, post in the E36 Tech section, not General Discussion. A moderator will probably move this thread over into that forum.