I've test-driven a '99 2.8 and I own an '01 3.0. Both engines are very smooth, but, obviously, the extra 40 or so horsepower and additional torque of the 3.0 is noticeable. My 3.0 engine has been stone reliable; all that's been replaced is the water pump. The car mags tested the 3.0 at something in the high 5 second range to 60 mph. How fast do you need to go and how quick do you need to get there? The 3.0 is not a Corvette or a Porsche hunter.
But, the truth is that the Z3 was developed as an inexpensive platform, for a 4-cylinder 150 hp engine. Smarter folks than I have commented that the more power you add to a Z3, the more evident the limitations of the chassis and suspension (trailing arms in the rear!) become. In my car and the other more powerful versions, BMW dealt with the issues of a the trailing arm suspension (drop throttle oversteer) by specifying staggered wheels and tires -- with the big fat ones in the rear. If you hustle the car around the curves, you can feel what the suspension is doing behind you, even though the car fundamentally understeers if you keep the power on. I've never had the car bite me in the ass, but I've never severely tested it by doing something like hitting the brakes hard in the middle of a curve.
The Z3 with either 6 is a nice car and a fun, satisfying ride . . . but I think efforts to transform it into the "ultimate sports car" by goosing up the power are bound to be disappointing. I don't know that the M version, with the 340 hp motor, was a particularly successful car, even though it was stinking fast.
Frankly, I would have bought the '99 with the 180 hp 2.8 liter 6, except that it was "arrest me red" and I've owned one red car already. I ended up getting a better deal on my '01 (silver), but the reason I bought it over the '99 was not because of the different and more powerful engine.