the M10 2.L is bigger better and easier to get parts for.
It is the same as the 2002 m10.
The transmission issue is a little harder to answer.
Taken from Roundel - late 80's publication:
5-SPEED TRANSMISSION CONVERSION
Overdrive 5-Speed Gearbox for the '77-'79 320i
The 320i has undergone numerous changes since the 1977 model was introduced to the U.S. market in 1976. A true BMW aficionado can identify the many differences by year, such as which year had ventilated front disc brakes or which years had the "S" package available in polaris silver.
The most significant changes to the 320i came in 1980 with the introduction of a smaller displacement engine. This was due largely to stricter exhaust-emission requirements, concern for greater fuel economy and CAFE standards. As a result, fuel economy was increased by 30 per cent. This achievement was accompanied by other modifications, including reduced vehicle weight, a revised emission-control system and an overdrive 5-speed transmission.
A 5-speed gearbox, overdrive or otherwise, was unavailable as an option for the '77-'79 320i. However, the '80-'83 model, equipped with an overdrive 5-speed as standard equipment, became a ready source for retrofitting the earlier models. Two overdrive 5-speeds are available through the BMW remanufactured parts program. One is for the '80-'82 models, part No. 23 00 1 209 775, and the other is for the '83 year only, part No. 23 00 11 220 421.
An overdrive 5-speed is a welcome addition to the older 3-series for various reasons. First, in topgear the engine RPMs at a given speed are reduced. The engine would not have to work as hard, thus, reducing wear.
Second, highway fuel economy is increased, though it would be difficult to justify the conversion cost on fuel savings alone.
Finally, and perhaps the best justification for the conversion, is the increase in highway driving pleasure. An overdrive fifth gear would not only reduce engine RPMs, but would also reduce the accompanying engine noise or "buzziness" characteristic of four-cylinder BMWs at highway speeds.
Although the scope of this article is directed to the installation of an overdrive 5-speed, installation of a close-ratio 5-speed is essentially the same since both gear-boxes have identical dimensions.
Those active in competitive events should consider the close-ratio 5-speed. For a discussion of close gear ratios or installation of a 5-speed in a 2002, see Jeff Mulcahey's article in the September 1982 Roundel.
The '77 320i is equipped with the Getrag 242/94-speed with gear ratios of 3.76/2.02/1.32/1.00.
The 4-speed in the '78 and '79 3-series is fitted with an additional backup light switch for "ignition switching" and is designated the Getrag 242/18. The switch controls a vacuum valve in top-gear that is disconnected in the conversion. Interestingly, the switch is responsible for the audible "pop" from the radio speakers when shifting from fourth gear to neutral. The Getrag 242/18 and 242/9 have identical gear ratios.
The '80-'83 320i, nee 318i, is equipped with the Getrag 245/4 overdrive 5-speed with gear ratios of 3.68/2.00/1.33/1.00/0.81. It is noteworthy for comparison that the fourth gear ratio is the same for all 3-series.
The '80-'83 320i also has a lower final drive gear ratio of 3.91 as compared to the older models' 3.64. The 3.91 differential is neither necessary nor recommended for the conversion and with the two-liter engine is best suited for competitive driving.
The 5-speed is 87mm longer than the 4-speed. Both transmissions utilize the same housing, the difference being that the 5-speed has an additional section added between the front casing and rear cover to accommodate the overdrive gearing.
Installing the 5-speed in a '77-'79 320i requires that three components be shortened: the selector rod (shift linkage), shift arm (linkage holder or shift tower) and propeller shaft (driveshaft). Installation also requires a longer speedometer cable.
All parts necessary for the conversion are readily available from BMW NA. They are:
Selector rod 25 11 1 206 888
Shift arm 25 11 1 208 464
Propeller shaft (see text)
Speedometer cable 62 12 1 359 333
The existing shift arm can easily be shortened; it is predrilled to accept a 5-speed. Simply use a hacksaw to remove 90mm of the forward portion. Protect the exposed metal with Rust-oleum or other rust-preventative paint.
The selector rod can similarly be shortened but welding is required. Use a hacksaw to remove 90mm from the center of the selector rod. Weld the remaining pieces after checking their alignment. The purchase of a shorter selector rod would prove more convenient to those without welding equipment.
The propeller shaft is the most difficult component to shorten. If the 5-speed gearbox is purchased used, the propeller shaft should ideally be negotiated in the transaction. Otherwise there are two options. Either purchase the shorter propeller shaft or have the original one shortened 90mm and balanced by a competent shop.
Purchasing a new propeller shaft for the conversion is not as easy as it sounds. There are three available, part Nos. 26 11 1 208 540, 26 11 1208 608 and 26 11 1 225 477 for years '80, '81-'82 and '83, respectively. Their differences are not indicated on the BMW parts microfiche but relate to the different flange bolt patterns. Suffice it to say that if the propeller shaft is purchased new, caution should be exercised to see that the proper one is ordered to match the gear-box output flange.
The early 5-speeds have the same four-bolt output flange as the 4-speeds. The late 5-speeds have a three-bolt output flange. The proper propeller shafts have corresponding flanges.
Also, there are two types of Giubo couplings. The eight-bolt Giubo, which is the same as in the '77-'79 3-series, is used with the four-bolt output flange, is slightly thinner and takes shorter bolts.
The only potential problem in coordinating propeller shafts occurs when a late 5-speed with a three-bolt output flange is to be installed with a shortened four-bolt propeller shaft. This is easily overcome by replacing the output flange with a four-bolt output flange, part No. 23 21 1 208 536.
Final preparations include replacing the gear oil and installing a new backup light switch. On '78-'79 models the backup light switch wire must be lengthened. These are easy tasks while the transmission is out of the car. The front and rear radial oil seals should be inspected and replaced if necessary.
Unlike the 2002 5-speed conversion, the 320i conversion is a bolt-in operation
The actual installation process is very straightforward. The original fasteners and cross member are used. The lower speedometer cable, though, is replaced with a longer one.
Unlike the 2002 5-speed conversion, the 320i conversion is a bolt-in operation. This is made possible by a cross member that adjusts fore and aft on sliding tracks. The cross member is the 2002, by contrast, is mounted on brackets that must be removed and repositioned for the conversion.
The final product of the conversion is a two-liter 320i that is a sheer pleasure to drive at highway speeds. Engine RPMs in topgear are approximately 20 per cent lower than in fourth gear. Following are the overdrive reductions in engine RPMs at selected speeds: at 60 mph, from 3,000 to 2,400; at 70 mph, from 3,500 to 2,800; at 80 mph, from 4,100 to 3,300; and at 90 mph, from 4,600 to 3,700.
Engine noise or whine is decreased significantly to surprisingly low levels. This is a major benefit that should not be underestimated.
The overdrive 5-speed is responsible for a 17 per cent increase in highway fuel economy, from 22.3 MPG to 26.0 MPG. The U.S. Environmental Protection Agency estimates annual fuel costs for new vehicles with a formula of 15,000 miles of driving per year with fuel at $1.25 per gallon. Under this method, the annual fuel cost for a vehicle obtaining 22.3 MPG is $840. The yearly fuel cost for an automobile capable of 26.0 MPG is $722. The conversion would theoretically yield a $118 savings in annual fuel cost.
An added benefit of the conversion is the increase in cruising range. Cruising range is extended from approximately 300 miles to 350 miles per tank of gasoline.
The overdrive 5-speed conversoin is recommended for those who enjoy spirited highway driving. While the savings in annual fuel cost and reduced engine wear are long-term benefits, the increase in highway driving pleasure is immediate.
From what I've read, back in the old days (good or otherwise), if you wanted a 5 speed gearbox in your four cylinder BMW, you really had only one choice: the Getrag 235/5 gearbox which was available as a factory option. These gearboxes were also available with an installation kit for retrofitment to four speed equipped cars.
However, it's been written that there had been three and not one close ratio gearboxes that were (at one time or another) available. These were the so-called "street" gearbox (235/5) with ratios of 3.37/2.16/1.58/1.24/1.00, a "rally" gearbox with ratios of 2.71/1.84/1.38/1.13/1.00, and a "race" gearbox with ratios of 2.30/1.56/1.28/1.09/1.00. For comparison, the stock 4 speed ratios are 3.83/2.05/1.34/1.00 and the overdrive 5 ratios are 3.68/2.00/1.33/1.00/0.81
Where the advantages of a close ratio 5 speed really shines is in the super-illegal 65-100+ mph range where the closely spaced third, fourth, and fifth gear ratios can be utilized. At the opposite end of the spectrum, the car is very flexible in traffic where, with a little bit of anticipation, one can be in an ideal gear for rolling along at low speeds with enough reserve to run up to whatever speed traffic will allow without constant shifting ( eg, second gear can be used for anything from barely moving up to 50 mph). On the negative side, the extra gear does mean a bit more stirring the lever around in heavy traffic. But once you leave the traffic behind and hit the twisty stuff, it's incredible fun.