As the previous owner of two 1968 Camaros, and a 1968 and 1969 Corvette (30+ years ago), I love the Chevy small block engine. If I did this to my E46, it would have to have fuel injection. Carburetors, as I remember, are a pita.
What kind of mods are you doing to the differential and rear subframe to support this swap? Some people us the M3 diff. The rear subframe really needs to be reinforced to handle the torquey small block.