seeing as the M3 is only rwd, the STi should hang with it stock. but spend a good $1200 on the right parts, and it'll prolly beat it.
M3Driver said:M$, I have a Dakar Yellow '99 E36 M3 Coupe, so it is does not have the muti-port throttle-body intake manifold or the double vanos system that the Euro M3 and the E46 US spec M3's have. However, it has run a 13.67 @ 102.1 (with traction control fuse removed) at the track and a friend that has a E46 M3 Coupe only runs slightly faster with a times around 13.3 @ 106. As a comparison my '90 Eclipse ran 12.4's at 112+ MPH, albeit, heavily modified. You also have to remember that even though the new car has more HP, it also weighs about 300 - 400 lbs more (which = uninspired handling)... Plus, the E36 M3's horsepower claim of 240 is well below what it actually should be... My car dynoed 243 HP at the rear wheels in 4th gear; corrected for ~15% drivetrain loss, that equates to about 285 HP at the flywheel.
Chawklit, a FMIC can defnitely boost HP. There are a number of factors you have to consider. First of all, as M$ mentioned, you will have a much larger surface area to cool the air and this surface also is mounted so that fresh air constantly moves accross it. You will also experience more "heat soak" (which = less consistant cooling) with a top mounted unit, because it sits right on top of the engine. Another factor is that a good FMIC will have much less pressure drop accross it than the factory top mounted unit, this mod alone will increase the boost at the manifold slighty (1-2 psi), which in-turn will increase HP... but, even if you use a boost controller to turn the boost back down to the factory levels, the turbo will not have to work nearly as hard to produce the same boost pressure, because there is less pressure loss in the intercooler / piping after the turbo. A larger FMIC will also support a much larger turbo in the future (which means more potential HP), because of its greater flow capability.
Hope this helps.