We had one when it was new! Not a bad car - the more it was thrashed the faster it went. Went fast for what it was. Petrol consumption was not great though. I loved that car! Red it was... I booted it everywhere and it never missed a beat! It did huge mileage too in a short space of time.
Many recommendations have surfaced for the weber conversion. You could go for a side draft weber performance conversion but that would be expensive - new manifold, fuel pump etc etc
Here's a thread about carburettor performance upgrades to an E30 with same engine as yours although it may be that these particular carbs may suffer badly with emission regulations, so choose carefully.
http://www.e30zone.net/modules.php?name ... highlight=
(The original Pierberg carb (has auto choke) is not a favourite - it is complicated and had problems often with the ferrules that hold the floats for the needles and can be fairly simple to fix but they soon drop again - the repairs never seem to last well to that carb.)
The engine - the M10 - is brilliant in terms of reliability. It is chain driven so no cam belt to worry about.
It has its little annoyances. In cold weather the car doesn't draw enough heat when stationary to give heat through heater. This means when you come to a stop the heater blows cold. There was an upgrade available (extra pump) but few were fitted. Rear drum brakes annoy me and it has those.
Best upgrades probably just new ignition parts, probably nothing else is cheap. New suspension bits best value upgrade. H & R (front and rear) anti-roll bars are raved about and I don't think the 316 had a rear anti roll bar so a worthwhile purchase that would help take advantage of 316 the light weight E30. Also get some second hand BBS alloys. Ok, it's already getting expensive.
Look out for, as usual with old cars - rust, bad welds, smoke/bad noises from engine, oil/water mix = mayo look inside oil filler cap etc etc
I have to say though, I wouldn't buy a 316 now. I don't really like carbs and fuel costs are going to be bad relative to performance for a daily hacker - but if it's cheap you may be tempted to get it. A 325i is a much better car and are not expensive to buy.
Good luck with your decision man.
Personally I would like to have another M10 engined E30 so - a 318i M10 with megasquirt installed, and later with a turbo would be perfect. But that's big money.