If the M3 was AWD, I would have test drove both before buying my 04 S4.
Btw, they had think to rename the next M3 to M4 but they decided that the M3 was so well known that they will keep the name, nice article in this month Motor Trend.
Infos: It will be powerer by a V8 4.0 liters if rhumors are valid and should be close to 400hp. We'll see (Source: Motor Trend, august or september 2004 (too lame to check if it's aug or sept)