To me, the M3 is the be-all, end-all luxo sports coupe (or even sedan now). I would defintely choose it over any mercedes, IS-F, S4 (even RS4), etc...
However, that assumes you can comfortably throw down $80k.
The 335i is definitely still more than most of us "need" and looks and performances incredible.
So I guess what I'm saying is, Get the M3 if:
A) The $80k isn't a big deal and you want the big dog car.
B) You actually are tracking this car and need the extra performance, LSD, etc.
Note: If you're considering (B) without qualifying for (A)......wow.