this engine won't be going into the base models. its going to be there to fill the gap between the 330ci and the m3. because thats going to be a big gap. the 330's will have 250hp and the m3 will have 400. that is a BIG gap. i think the reason the m3 is going to a v8 is so that it can make competitive torque numbers. they can always squeeze big hp numbers out of just about any engine but torque is what makes a properly fast car. just look at hondas, if they fall off vtech they absolutely suck, its the same concept.
also, the reason that they are going v8 and not making a bigger 6 is down to weight. while the new 6 cylinder (R6) is very light for an inline 6, they aren't that much lighter than a v8. now the block from the existing engine can't be taken out much past 3.2 litres with out risking structural weakness by having the cylinder walls too thin. so they would have to make an entirely new engine that will ONLY be used in the m3. and thats a lot of money in R&D for just one car that is also very low selling.
the s54 is slated for use in the upcoming m1, or m coupe as its tipped to be called to save confusion with the original m1 monster. so the ongoing development for that engine isn't without reason. the s54 isn't unreliable, its just designed to run on high octane fuels that just aren't available in the US. 98 octane is the minimum recomended fuel for them. running it on a lower octane is always going to throw up problems after a while. the engines need constant maintenance (like all ///M engines) and i think that a lot of people fail to realise that yes it is a very highly strung motor, and no you can't miss a service and it'll all be fine and dandy. thats most likely where the unreliablility stories come from.
anyway back on topic, i think this engine is going to be an absolute pearler. i think they have chosen twin turbo route so that they can keep the 3 series as an all 6 cylinder line up, as the 318i has been dropped from the e90 range. no doubt they will be rolling out a marketing campaign that goes something along the lines of "the greatest 6 cylinder cars in history" or some rubbish like that. it is a good idea to fill in that 330 to m3 gap though otherwise there will be a lot of disgruntled buyers out there that want a fast 3er but don't have the $$$ for an m3. very good idea