I've got a G reg 320i SE E30 and really like it

I got it when I was 19, and couldn't really afford insurance on a 2.5 back then, and to be fair I would probably have killed myself if I had got one..
There really isn't a lot to go wrong, and most replacement parts can be sourced very cheaply, either new or second hand, and if you're any good with a spanner it's a very easy car to work on, just get yourself a Bentley manual, and find a good E30 forum..
As for 320, I suppose there really isn't much point in them when looked at against the 325. I suppose. But the engine is lovely, sounds very nice, does go well (partially due to lower gear ratios). The engine is NOT crap as you say, just lower power (40bhp), it depends on what you want, I find it sufficient, it's is definately not slow, it similar power to the 318is engine, but 6 cylinder and makes a gorgeous sound. The car itself is a joy to drive, i've only got mine back on the road recently due to it being SORN for over a year (silly attempt to save money), and I'm sooo glad I have it back.
Obviously I am very biased, I love E30's and own a 320, but don't discount it just because it's slightly lower powered, it is still a brilliant car, and i'd definately prefer a 60k mile 320 to a much higher mileage 325.
edit - Insurance. Some classic car insurance companies class the E30 as a classic, but all the ones I found that do are 25+ only. Which is a bugger.