Major said:
Like in my signature, to the right of the left high-beam. Except without the hole, just put it behind the grill.
Exactly what I did with my E30. Seemed to work well.
I dont really like using cone filter. I dont feel that they filter as good as the BMW paper filter does and apart from the extra noise I did not notice anything extra. The noise was awesome though except at highway apeeds it irritated me, so I always went back to STD box for travelling.
When I put the cone onto the E46 as in that other thread, I built it into a container (to isolate it from the under hood heat & hot air) with some openings on the bottom and a "RAM" pipe in the front going to the fog light place. But it made so much noise that I took it off after 1 day of having it.
BMWE34 go for a BMC or K&N cone if you are going to go that route.