I've heard many people say that BMWs are very reliable. Those Germans tend to overbuild their stuff, although regular maintenance is a must.
For me, personally, I would keep the SVT. Having a BMW would be tempting, but I couldn't live with the 2-door thing. With only 2 kids, maybe, but I've got 4 now, and a minivan, to boot. I have given passing consideration to a later 4-door E36 M3, but they are still a bit pricey. A later 4-door E36 325is (if there is such a thing?) might be just the ticket.
As for performance, RWD is nice, but I'll admit that I haven't owned any RWD car since about 1986, and all I remember about it, specifically, with my Beetle was that on slick roads the thing just wanted to come around all the time. (It was butt-heavy, too, though.) So if hp:weight and tq:weight are close, and the only difference is FWD vs RWD, ask yourself how much better can the BMW really be? And can you really get 20hp from a BMW chip? Or is that just the claim?
I've agonized with this same question--should I upgrade performance and convert to RWD by trading in my Contour? Do I want to? I've considered several potential replacements, but I've always come back home, for many of the reasons you cite in your initial post.
MHO.
