After looking at a number of European sports sedans, I recently purchased an Audi S4, in favor of the E36 body BMW M3. The car is very fast, refined, sporty, luxurious, and has all-wheel drive. Unfortunately, it doesn't handle quite as well as the M3, and has already been in the shop once (when it had less than 2k miles).

Pros:
- Very very fast off the line - it feels a bit faster than the M3. The turbos spin up with almost negligible lag, and torque is essentially constant after 1850 RPM, pinning you back into your seat.
- Steering and suspension are both tight, although not in the same league as the M3.
- Beautiful luxury features - power seats, xenon headlamps, great sunroof / moonroof combo, well-lit, plush interior, nice climate control, front loading CD player included, trip computer standard and built into the dashboard, etc. etc.. This is a very luxurious and comfortable car.
- All-wheel drive.
- Reasonable price, considering that you get an all-weather car, a sports car, and a luxury car, all rolled into one.

Cons:
- It doesn't look very aggressive at all, resembling the A4 perhaps too much. Some people will view this as a positive.
- Some of the levers (hi-beam) are poorly positioned, and you can hit them accidentally while trying to perform another task. The cruise control mechanism is anything but intuitive.
- The navigation system is weak, not having a map and requiring selection of letters via tuning a dial (a slow process).
- The suspension is not as tight as the M3, and the car rides fairly high. The steering is also not as precise as the M3.
- The large side mirrors make the car a little noisy at high speeds.
- It's already broken down on me once (almost inexcusable in a new car), with a faulty clutch sensor to blame. Audi of America was very nice about it, but the local dealers treated me like dirt. Audi has to work on enforcing good dealer behavior.
- The new E46 M3 will have 340 horsepower, leaving this car in the dust. Of course, that car will also cost $15k more.

In summary, if you're looking for a sporty car that doubles as a luxury sedan, this is the way to go. If raw performance is your overriding concern, then look at the E46 M3. It comes out next year and boasts 340 horsepower.

Update 6/10/00: If you're looking for a very thorough review of this car, or if you already own it and want to read some tips, check out "If it were female, I'd marry it" by john_brendler, also here at Epinions.