I just picked up a 2004 325i, non sport this season and I would have loved to find one with the sport package. Based on what I see in the ad, this would be a great deal and you may have some room to negotiate with the seller.
Before you buy - take it to a trustworthy BMW mechanic and have them look over the entire car and if it needs any minor repairs, have the seller work those into the deal before you buy it. I can recommend a great mechanic for this model of car depending on where your located in the city. Apparently the E46 engine is extremely reliable and easy for BMW indy mechanics to work on.
I haven't owned mine for a full year so I can't vouch for 1500-2500 in repairs, I would imagine that between oil changes and regular maintenance most cars that are 8 years old could be in that range..and if you cannot afford to do the regular maintenance on a car then IMO you are not ready to own any car.
Anyways - if you're interested, take it to a mechanic and have them look everything over and if all is good then I say buy it! I love my 325i and regularly get compliments on it from friends and family