the 2.8 is OBD II as far as I know and the 2.5 is OBD I so I don't know how that will work out. If your going to upgrade the engine, might as well go with the euro 3.2 M3 engine, heh. Otherwise if you don't want to change the block and don't think you can do all the work yourself, might be a good idea to just go to a local shop and ask them how much a rebuild with a little bit more ooomph will be and then see from there, maybe shop around. I guess some things to consider are performance cam shafts, manifolds, boring it out a bit more, maybe bigger injectors, makes sense if your going to do the intake manifold. I'm sure you know this but I don't think it might be too much more expensive to get performance parts when you have to rebuild anyway. I am not too mechanically inclined but I do know that a rebuild engine with performance in mind can mean lots of fun and sometimes not that much more expensive to do. Oh and if your going to do what Bmw 325i 7803 told you about the emissions, make sure they don't have cammeras because lately it has been hard for the emissions people to fake stuff, one slip up and bye bye license. Well, godd luck with whatever you consider doing, hope it turns out good for you.