Everything these guys said is spot on. The biggest improvement you can make to your car is driver talent. I do very well at national SCCA events, and I know that even after I won H-Stock last year in St. Louis by over 5 seconds, there are still guys out there that would hop in and shave a second off my time on their first try.
As was also stated above, an E46 will never be competitive nationally in STX. So, if you have talented drivers locally in Toyobarus or RX8's, kiss any chance of winning goodbye, even if you drive the piss out of your car. If it's like most regions, prepping it a lot and driving the piss out of it will still be your other average drivers in the same class.
If you have a tire index class in your region or they run the national RT classes, ditch the CAI and run DS tire. By far your best shot at being competitive (although still not great haha).
'02 Mini Cooper #40HS