Op:
Keeping your engine; Building power
I assume your referring to your e39 for this thread. We have alot of options for more power for our 528s. Of course if you want to make more power out of the original motor you need a supercharger or less commonly used turbocharger. You could go with a twin screw type that delivers more torque than a centrifugal which gets its power a bit later in the rpm band. ESS has a twin screw vs AA or VF that have centrifugal units. The twin screw is more expensive so you do end up paying for the extra torque earlier on. If you want even more power you can upgrade to stage 2-x kits which have larger pulleys and belts for more boost, larger injectors and intercooled applications in some instances. However take note that the higher in boost you go the more risk you will put your "stock" engine. When I say stock I mean an engine having no modifications to the head to hold pressure, head gasket, stronger bolts for the head and stronger pistons ect ect.. The "safe" level for boost is within 6-8 psi, any more and you might need stronger internals. In addition your transmission has to be strong enough to handle the increase power ( and torque especially if you go the twin screw route). Having an auto will mandate changing to a stick like a 5 speed for us i6ers. Budget the price for a trans, clutch able to handle the power your putting down, flywheel, slave and master, pedals, cluster, driveshaft and shift linkages . You will also need an alignment of the EWS and DME I believe. This is expensive but worth it if you really want it.
Engine swap:V8
You could go with an engine swap. For us I6ers, swapping to a v8 from the 540s (M62/tu) or M5 (S62) will require the entire front of the vehicle ( and nearly all major parts from the m5). For one the heavier weight of the v8s will make you loose alot of parts from the I6. For one the entire subframe (front) including the R&R (rack and pinion) will be lost and you'd gain the recirculating ball steering system that is less responsive in corners than the R&R, struts and shocks for the heavier engine weight, and various suspension components. Plus the 5 speed auto or 6 speed manual transmission from the 540/ m5 as your 97 528 has a 4 speed auto. Add the driveshaft and diff . This costs money but is doable as well.
Engine Swap: S54
IF not the v8 you could do a swap my friend is doing which is taking virtually everything off an e46 m3 to put on his car ( a 99 528i). This job is being performed by an extremely reputable shop based in NYC. ** One thing to remember is its better to buy a damaged car (not impacting any major stuff such as a side impacted car) so that you wouldnt have to waste time and money sourcing out parts . After the transfer of parts minus the engine my friend will arrange to have a hpf kit installed or supercharger kit costing a great amount of money but thats his project not mine.
Engine Swap: 2JZ T/TT
You could always do a Supra 2JZTT swap. Not sure to what extent parts will need to be changed but electrics seem like a nightmare. You could find these engines for a reasonable price with the trans and source a shop to do the swap. Ask for a quote and see if thats the direction you would like to go. Look for a couple 2JZ swapped e39s on m5board and youtube.
Engine Swap: LSx
A couple forum members have done an LSx swap. note: LSx isnt the actual name of the engine since the x could mean any engine coming from the LS series including LS1, LS3 ect. You could buy a used motor and trans combo for a very reasonable price and drop them in. I've heard some LSx engines are very light and the subframe from out I6s can still be used. Im not sure whatelse would need to be changed besides the motor and trans so you have to research that for yourself. Again find a shop capable to do the swap and ask them if they had experience with these swapping jobs, whats needed and decide if this is the route you want to go.
I tried to outline some choices as best I could, and I really tried to make my info as accurate as possible based on my own research, experiences and advice given by various shops. In the end its up to you to validate or reject info based on your desires and budget. Im not sure about a drag car though, your better off going with something easier to work with and lighter. A luxury german sedan might not be the best choice. After all you dont see them on passtime

. Sorry for the long read/post and good luck,
**If any info I wrote needs to be corrected please let me know**