The high-performance luxury car isn't a segment; it's a gosh-darn arms race. When the Audi S4 entered 2004 with a 4.2-liter V8 wedged into its small engine bay, it represented the latest in borderline-insane factory modifications made to an already capable sport sedan. A whopping 340 horsepower seemed like a tremendous amount at the time, besting even BMW's mighty M3.

But in this cold horsepower war, any sort of dominance the S4 enjoyed has quickly been eroded by Audi's dual nemeses from Munich and Stuttgart. Never mind that a regular BMW 335i is now quicker than the S4, but the upcoming M3 will be powered by a 420-hp V8, which will thoroughly smoke the S4 in a 0-60-mph sprint. Likewise, the all-new Mercedes-Benz C63 AMG has a truly monster 457-hp V8 that should make it the quickest of the lot. Yet both these cars are more expensive than the S4 and are therefore no longer really appropriate competitors -- they are closer matches to the Audi RS 4.

Regardless of its competition, or lack thereof, the 2008 Audi S4 is still a wild ride. Besides its potent V8, the S4 differs from the regular A4 by its sport-tuned suspension, bigger wheels, performance tires, more powerful brakes and several unique styling elements. Plus, its Quattro all-wheel-drive system has a 40/60 front-to-rear power distribution that gives it a more aggressive (and less understeer-prone) feel while cornering.

Like the A4, the S4 maintains the good looks and excellent interior quality that have become two of the model line's best selling points. Also, the fitment of all-wheel drive and a selection of sedan, wagon and convertible body styles give the S4 a leg up on its competition. However, despite the expected price difference, the new M3 is rumored to eventually come in sedan, hardtop convertible and perhaps wagon forms.

Although its previous principal competition may have moved to loftier plateaus, the 2008 Audi S4 remains a very attractive choice for those looking for extra oomph in their sport sedan. It's a serious performance car that can easily and comfortably perform the duties of an everyday or road trip companion. Still, those who want similar performance but with a less hard-core driving experience, should look at the BMW 335i, Infiniti G35 Sport and Lexus IS 350. The BMW and Lexus actually out-accelerate the S4, but neither offers the same type of visual panache or the street cred that goes along with the Audi's mission of intensifying an automotive arms race.

The 2008 Audi S4 is available in sedan, wagon ("Avant") and convertible ("Cabriolet") body styles with one well-equipped trim level. Standard features include 18-inch wheels and tires, sunroof, xenon HID headlights, 12-way power-adjustable Recaro seats, Silk napa leather upholstery, dual-zone automatic climate control, heated mirrors, Bluetooth and a 10-speaker audio system with an in-dash CD changer and satellite radio. The Cabriolet is equipped with more conventional leather-upholstered sport seats in place of the Recaros, along with heated front seats and a power-operated "Acoustic" soft top that promises a quieter cabin, especially at freeway speeds.

Options for the S4 include parking assist, memory seats, heated front seats (sedan and Avant), heated rear seats, an upgraded 215-watt Bose stereo, an iPod interface, a navigation system and, for the sedan only, a "DTM" exterior package that adds unique front and rear fascias, multispoke wheels and carbon-fiber spoilers.

The Audi S4 is fitted with a 4.2-liter 340-hp V8 that sends its power through either a six-speed manual gearbox or a six-speed Tiptronic automatic. The latter transmission allows manual-style shifting via steering-wheel-mounted paddles. The Quattro all-wheel-drive system, which is standard on the S4, is unlike most other Audi Quattro offerings. It has a 40/60 front-to-rear power split in normal situations to give the car a more dynamic attitude when cornering. Audi claims that an S4 sedan equipped with the manual tranny can sprint from zero to 60 mph in 5.3 seconds, with the Avant ringing in at 5.4 seconds and the Cabriolet at 5.8.

Stability control, antilock disc brakes and a multitude of airbags (including front seat side airbags on all body styles and full-length side curtains for the sedan and Avant) are standard on the 2008 Audi S4. Rear-seat side airbags are optional on the sedan and Avant. In National Highway Traffic Safety Administration crash testing, the A4 sedan (on which the S4 is based) received four stars (out of five) for frontal crash tests, while side-impact testing resulted in five stars for the front seat and four stars for the rear seat. In Insurance Institute for Highway Safety tests, the Audi garnered ratings of "Good" (the highest possible) for both frontal-offset and side-impact categories.

As one would expect from a 340-horse V8, performance is thrilling, and on winding back roads, the S4's top-notch underpinnings result in excellent handling while still providing a supple ride. While the Audi isn't quite as razor-sharp as a BMW or Infiniti, the extra grip afforded by its all-wheel drive could justify the trade-off for many enthusiasts, particularly those who live in parts of the country where rain- or snow-slicked roads are a part of life.

Audi consistently produces some of the finest automotive interiors and the 2008 Audi S4 is no exception. The sedan and Avant's design differs slightly from the Cabriolet's, but all models feature superb materials, excellent fit and finish, and efficient controls. The optional navigation system isn't a model of user-friendly design, though. As serious performance cars, the S4 sedan and Avant are saddled with standard Recaro front seats, which feature aggressive bolstering to hold one in place when zipping around corners. Although the rear seat is fine for small children, adults seated back there will likely complain about a shortage of legroom. The Avant wagon provides up to 61 cubic feet of cargo space with the rear seats folded.