Congrats on the purchase, I also just purchased a 94 530i about a month ago! I got mine
for $9,900 Canadian with 170,000KM, M5 bucket seats, Dynamic Racing package, 5 speed manual. So far the car has been amazing for me, I love this thing and it gets a lot of looks especially the fact that I'm a 22 year old student with a Beemer. Girls love this shit too!
As far as performance goes, I think it kicks ass, but I now I know I'm going to have to find myself a 540 with a 6 speed in a couple of years for sure! The car will get you to 100MPH in short order, the handling depending on your tires is awesome, I have the Fuzion ZR1 tires and they are fantastic!
The only problem I have encountered and one in which I will set-up a new topic on is the opening mechanism for the trunk. It wants to stick and I have noticed a tinge of rust, I will remedy that this summer for sure. The previous owner also mentioned the control arms, he has replaced two sets in the vehicles life, so that is a weak point in the car. As far as the block goes, the mechanics up here tell me the V8 didn't have the same problems with the block as the other models, and they have yet to see one wtih that problem, so I wouldn't worry about that too much!
Otherwise enjoy this thing and really baby it, afterall it is 10 years old now! Here are some pics of my car let me know what you think. If your looking for a cheap upgrade to your lights, visit coolbulbs.com and check out the Shining wizards, I put them on and they look awesome!