An e36 has a muffled air intake so that the intake roar is not audible outside the car. Some folks have debaffled their airbox so it flows a little easier. Purchasing an aftermarket air inlet will not give you any benefit beyond what debaffling your air box will give you. There are instructions posted in various places for how to do it.
Don't expect any noticeable difference from an after-market system or from debaffling your air box, other than more noise.
Also, aftermarket air inlets reduce the resale value of the car, so if you buy one, keep your airbox to put back when you want to sell the car.
Don't use an oiled cloth filter. No one ever keeps them oiled properly, so they end up letting a lot of dirt into the engine.