All E46 M3 are SMG2. SMG1 can be found on E46 325/330.
Some infos for you.
The 2001 E46 M3 appeared worldwide with the new 3.2 L S54B32 engine. At the time of the car's introduction, this engine had the highest specific output naturally aspirated engine ever made by BMW, producing 343 PS (333 SAE net hp (252 kW) in North America) and 365 N•m (262 ft·lbf) of torque.
The first batch of E46 M3s delivered were in the striking color of Laguna Seca Blue.
The available SMG Drivelogic (also known as SMG II) transmission, a Formula 1-style electrohydraulic manual gearbox with no clutch pedal and steering wheel-mounted paddle shifters, is also a highlight.
The model also came with a new 6-speed transmission and red-line RPM of 8000, a first for any BMW. The engine also consisted of 6 independent throttle bodies and electronically driven throttles (without a cable).
The M3's S54 naturally aspirated engine produces more than 100 horsepower per litre (340 bhp/3.2 litre), a notable feat.
More read on E46 M3 here.
www.m3forum.net