The M10 is down on power by almost 10kw, almost a 10% loss. That is quite big in underpowered cars, the FI in the m40 is also much more accurate and therefore more frugal.
The m40 is also more responsive to a chip, not that these engines will gain that much. I love the m10 and its bulletproof nature but I suspect that a m40 will suit you beter.
But since you want to swap engines already, why not look for a good m42b20, that would be a huge improvement over your m40, but you will need the sump off your m40 to fit your subframe (e30 I assume) and then the wiring would have to be done by someone that knows the diff between the 25- and 30- pin connectors. Doable, and much better engine.
I would look for options with more power, not less. The 318i is underpowered already.
Regards
Jacques
ps. there is also a harder option, find an old m10b20 block in someones back yard from a 2002, strap m10b18 FI to it and you have roughly 130-140bhp. You will notice that increase, and you will have gobs more torque on you bottom end.