I drive an E46 318i N42 engine Automatic with just over 200 000kms and we have had it from new , And honestly , if these cars are maintained well , and if you do your preventative maintenance work on them , its actually a really beautiful car to drive , Fuel economy is good as well . Its not a racer but it is a smooth driving car. My Automatic still shifts smoothly and I love it . Its not the most powerful car on the road but its not a dead duck either . I can easily take on many of the newer cars If need be. And on the highway , it cruses up to 200km/ph effortlessly .
Iv had my fare share of issues but these were just common maintenance issues that effect most cars not only with just this engine . These engines are now in many many many BMWS (N42,N45,N46) so I don't understand why it gets so much negativity. I have only ever heard of the bad from forums regarding this engine , but you never hear of the good , considering there are more of these engines on the road now then their 6 cylinder variants as it was the cheapest at the time and many people did buy them and its still found on many of the newer cars as well.
You have to maintain them and fix a small issue as and when they do occur . They say that its hard to diagnose when there are faults and its hard to work on but If I could diagnose some of its issues when it does occure (using my INPA and the net) It cant be all that bad now can it.