I just jumped from an E36 to a E46. I don't think that you have to spend money on a ZHP but it's worth putting some extra change into an M package. Especially if the car is pre-facelift ... it looks much better. I don't think that you have to spend a lot of $$ to make a stock 330 faster than a ZHP. This is my opinion at least, correct me if I'm wrong.
Oh BTW, if you are currently driving a 328 then the jump is not worth it unless if you go for a 330 or M3