I have done such a retrofit on my 330i.
There are two types of paddle shift steering wheels for the E46, and you have to make sure that you understand the differences between them.
One type is the so-called SSG paddles which were fitted on non-M3 cars with SMG gearboxes. These paddle shifters cannot be used on automatic cars without modification of the electronic switches on the steering. The SSG paddles shifters switch between resistor settings, whereas the "manual" shifting of the auto gearbox requires a simple on/off switch. The internals of the SSG switches must therefore be modified by removing the resistors and changing the wiring to allow the on/off functionality. Clearly, this is a more complicated job to do.
This is an SSG wheel:
The other type of SMG paddle shifters are found on E46 M3 cars with SMG gearboxes, these can be used without modifications on auto gearbox E46 cars.
This is an SMG wheel:
In both cases, you will need an SMG slipring which has the two additional contacts for the SMG switches. I have such a slipring but it is not for sale as I hope to also retrofit an SMG steering wheel to my own Touring as soon as I find another M3 SMG steering wheel.
You will also need to make up a simple wiring harnass to connect the slipring with the gear shifter in the center console. There are many DIY instructions on the ol' interwebs.
http://forum.e46fanatics.com/showthread.php?t=826971
http://forum.e46fanatics.com/showthread.php?t=895897
http://forum.e46fanatics.com/showthread.php?t=1027535