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Why not take the middle ground and get the 130. Bit more power to play with and a little bit cheaper then the 135. I personally prefer the hatchback in the looks department as well plus you get some extra room.
I have a 130i. Bought mine second hand for 48k. I love. Still wish I could have afforded the 135. Still wishing for a little bit of extra grunt.
The s3 is a good choice and there are a F%$@ load of mods available for Audi/VW engines. easy to get the power up.
Not too many mods availabel for the BMW NA engines
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