BY ALL MEANS AVOID MONROE struts for your beemer! I did this on a GTI, and it was like driving a 70's Cadillac--very mushy.
Get the Bilsteins. OEM is either Bilstein or Boge. Koni is also good. I've heard mixed results about KYB, but have had very good experience with them on an integra. They're all not cheap in the short run, but last a long time and are worth the money. Monroe you will forever regret and its money wasted.
$500 does sound like a lot.
98 328i, black/black, manual, canadian sport pkg, ECIS intake, koni sport adj's, dinan springs, oe/oem clears.
Considering: tms shark,M 17" wheels, larger sway bars.