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supercharger is force induction as well as turbo
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Yes they are, and ideally they are both almost equal in efficiency (depending on the actual units you compare), but for M3's, I have yet to come across a SC kit that makes the same amount of power per boost level that the turbo does (SC's have more parisitic loses and the famous heat soak effect) and we don't live in an ideal world (if not I would be driving an F50 as my daily driver with one girl from every race/nationality to accompany it, oh and I would be a millionaire too).
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so what is the consencus? Do you guys think that the supercharger is better or the turbo? What kinds of things do you then have to watch out for interms of changes to the car? Do you lose alot of gas mileage or what?
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SC vs. Turbo = the never ending story. It just comes down to personal choices, so you just have to listen to people's opinions to see what it is you are looking for out of a kit. I have had both and have only been happy with one (even with the proper programming on the SC, which I didn't have at the beginning).
Changes to the car: The only thing you really must change is the clutch. Now there are a few options I would recommend if you are going Stage 2, but you only asked for the necessary.
Gas Mileage: I get about 250 miles on a full tank of gas. I think the M3 tank is about 14-16 gallons (don't remember the exact number). These numbers fluctuate depending on where, when, and what I am around at the moment

. Now this isn't bad considering you are at a higher HP than an M5 (for Stg. 2).
Just be prepared to attend some of those BAA meetings no matter which kit you decide on (SC or Turbo).
Good luck in your decision!!!
PS. Just one final thought. I have not seen many Turbo to SC conversions done (I can't think of one for that matter), but I have seen a ton of SC to Turbo conversions (myself included).