I don't think anyone will know for sure until some competitive E46's show up this year.
Hell, I'm not convinced that the E36 is totally developed yet. I think it will still get faster, even with the restrictor.
That said, the E46 should be a little better suspension wise. It definitely has more front track and a stiffer chassis. Obviously the 150 extra pounds will hurt it, but some of that can be placed in optimum areas with a well thought out cage.
As for the cost of the LSD. It's "expensive", but not that much more expensive than what it would cost to build a competitive LSD for the E36. A good clutch LSD for an E36 will cost around $2200, a Kaaz E46 diff is around $3000...those prices are from Diffsonline.com. I know Blanton charges more for a clutch pack E46 diff.
[This message has been edited by Bryan Watts (edited February 16, 2005).]