The golf tee mod is for making the exhaust a bit louder at low RPMs on the 328s. The 328s are the only E36s which have a vacuum actuated flap in the muffler which opens up somewhere above 2500-3000rpm (I forget exactly where) to help with mid-range power. By pulling the vacuum line off the muffler and plugging it with a golf tee (or similar), you can keep the exhaust flap open at all times to make the stock exhaust a little more aggressive sounding. But it's a barely noticeable difference from within the car, but is noticeable from outside under load (acceleration). It's one of the first things I did to my 328is when I bought it. As long as you have the vacuum line fully plugged, it won't cause any other issues.
1998 BMW 328is
1966 Pontiac GTO
2007 Subaru Impreza 2.5i 5-door
View my photos: Caught in the Wild
Last edited by ZeGerman; 07-04-2012 at 04:07 PM.