It would probably defeat the purpose of having AWD if its lowered though I can't stand the fender gap on the front of the 03 xi. I though about getting the Bavauto kit for around $650 which includes sport shocks and Bavauto springs. My E28 has this same setup and it sits great, not the "slammed to the ground" look. My previous E34 535i also had this same setup and it did look "slammed to the ground". Will doing this conversion slam the E46 which I don't really want to do or give it the sport set up as a 325/330? Also, will a rear and/or front camber kit be necessary or will a 4-wheel alignment fix any negative camber?