The early e46 M3s had a bearing recall on the motor, as long as it was done there's not really much to worry about, but make sure it was done. Other than that, trim options just got better over time. Halfway thru 03' they added LED tail lights which look quite nice, but can be retrofitted to the earlier cars it's just not cheap. I believe in 03 they also added navigation.
I love e36's but I'm not naive enough to claim it to be better than an e46. Don't get me wrong, the e36 is a GREAT car, and it does many things well. In some respects it's more fun to drive than the e46 as well. BUT, it's also starting to show its age design wise in my opinion and a new camry comes with more HP. You'll want to look at how much you intend to drive it though because maintenance on an e46 M3 is much more than an e36 (but this also assumes you didn't buy a beat ass money pit of an e36 which is possible).
Another option you might consider is buying an e46 330 coupe. They look great and still come with 250hp which can be fun. They're pretty much as fast as an e36 M3 and you get the looks and updated features of an e46.