a small turbo can be a good idea if you want it to be. What i mean by this get ready to spend a lot of money!!! most people dont realize what comes with a turbo kit. I know a few guys around here who did the project themselves and pieced together a kit and there car was done for about 3-4 months. Not including all the tuning... Which leads me into tuning the Turbo. You will want to get your turbo tuned to your car and other mods... This isnt as easy as it sounds as a lot of places car charge upwards of 500$ an hour just to get your car to run right. If you want a pretty fast DD car i would recommend intake exhuast cams all the supporting software suspension brakes, fan delete pullies, short throw shifter nice tires all these are things you can do to your car that you will feel a difference while driving.
Some useful sites
also some more good sites
the list goes on and on and on..
Cliffnotes:turbos are expensive, let me know how much you are planning on spending and ill tell you if a turbo e36 is in your "real" future