Not true about the S42, it that state of tune driving it flat out, you can get 40 hours of racing.
You can get a very streetable motor from the M42, by modding it with S42 bits.
And yes, I do know a little about these motors.
My picks for E30's are M3, 320iS, 325iS/318iS (the last 2 tied). The 318iS is the best handling (non M) car in the range. You just need to tweak the motor to get it really hauling. And M parts aren't cheap. So it is a lot cheaper to fit the High compression head to the standard motor in the 325i for real performance gains.