I have both, right now. Both E90.
2008 335i. Jet Black, Premium, Sport, Cold Weather, Comfort Access.
2011 M3. Alpine White, Fox Red, Competition, DCT, Premium, Convenience.
For most driving/commuting/traveling, the 335i is FAR superior. More comfortable, more accessible speed, way better fuel economy, quieter, less expensive.
For driving at the limit, it isn't even close. One is a "regular car"; the other is a sports/race car with a license plate.
The M3 is noisy, rough, jerky, guzzles gas, is harsh in every way - driveline, suspension, noise. Plus, the M3 has to be revved to be even CLOSE to the acceleration available from cruise in a 335i.
At full effort, the M3 would not just beat, but humiliate the 335i. But that's really only available on a track. On the street, absent stupid, license revoking antics, the 335i is better.
I LOVE my M3, and would never consider trading it for my wife's 335i. But her car is a GREAT car. Great road feel through the wheel, great performance, great economy, good comfort. I'm just willing to tolerate all the compromises required, to get what the M3 offers. That V8 sound is incredible. The only cars that sound as incredible are 2x+ the price and only one has a V8 (Ferrari F430). The acceleration is excellent, the handling is excellent as well. The ride is fine, and I love that the car is so configurable (Throttle, Steering, Suspension, Transmission, DTC).
I thought I'd be overwhelmed with the differences from day 1. Not really so. It has grown on me over time. I think that's the mark of an enduring love of the differences. In fact, my wife asks more and more to drive it, vs her 335i. It's a fantastic car, IF you can accept that it's a gas guzzling pig, noisy, not as comfortable or smooth, and way more expensive.
After putting about 4k miles on the M3, I have to strongly advocate for the DCT, irrespective of your ability to drive a stick. I'm quite capable and willing to drive one, but this M3 engine is so willing, and so requiring, to rev, that you'll literally NEVER have your hand off the shifter or your left foot relaxed on the dead pedal unless it's a deserted road. I pop it down to 4th, then back up to 5, 6, 7 ... back down 6, 5, 4, 3 ... zip along until I cross my 80mph warning chime, then back up 4, 5, 6, 7 ... down to 5 and around a couple slowpokes. Back up 6, 7 ... throughout my 25min commute. What a PAIN that would be with a stick. Bottom line is, before long it just wouldn't happen and I'd putz along not getting all that fun in. Yuk. Bring on the flappy paddles and grins!