I ditched my dying '97 Dodge Avenger for the S40 T5 and haven't looked back. The T5 is definitely the way to go. My partner has a '06 3-series and I wouldn't trade with him for a second. Styling, build quality and performance are top notch. Only negative comment I have is the city MPG isn't that great. Even then, I wouldn't hesitate recommending this car to anybody.
Exterior style. Car is silver w/ 17" wheels. Love the inside style. Black leather w/ aluminum trim. Center stack is gorgeous. Sprung for optional aluminum trimmed steering wheel and shift knob to make everything "pop". No complaints on performance. Go for the T5 and this little car will move!
City MPG isn't much better than my old Avenger. Other than that, I honestly can't think of anything.