Warning: If you are not competent or do not feel comfortable doing any of these modifications or procedures, then please do not do so. I will not be held responsible for any damages caused by a result of your actions. Now on to the fun stuff!

Parts:
Required
Bilstein PSS-9 Kit
10mm H&R Hubcentric Wheel Spacers x2 (may not be required with 17" wheels)
Longer Wheel Bolt x10
Ball Joints (BMW part # 31-12-6-758-510) x2 (generally not required if you have the BMW tool)
Nylock Nuts (hub to control arm ball joint and tie rod to steering arm) (BMW part #'s 32-21-1-095-267 and 31-32-1-090-633) x2 each
4 Nuts to hold rear shock mount to car (Part Number 31-33-1-092-887)

Top Right: Bilstein Kit
Top Left and Middle: Hubcentric wheel spacer
Bottom: Longer wheel bolts

Optional
96+ M3 Strut Hats (BMW part #'s 31-33-2-227-897 and 31-33-2-227-898) (camber adjustment)
96+ M3 Reinforcement Plates (BMW part #'s 31-31-2-489-795) x2 (extra insurance)
96+ M3 Control Arm Bushings (BMW part #31-12-9-069-035) comes with 2 (better control arm locating)

Top Left: Strut Hat
Top Right: Reinforcement Plates
Bottom: Control Arm Bushings

Equipment:
Various Sockets and Wrenches (some very large sizes required)
M8 and M10 Torx bits
Pickle Fork
Allen wrenches
Pry Bars
Hammer (the bigger the better)
Rubber Mallet
Dish Soap
Stiff wire
Locktite
Torque Wrench

Air tools always help ease removal and installation

Procedure:
The method described below removes the control arm and the strut. It may not be necessary to remove the control arm on all installations. e36 M3's will be slightly different (non replaceable ball joint and sway bar mounts to the strut)

Strut Removal
1) Raise vehicle, properly support vehicle, and remove wheels
2) Remove two brake caliper bolts (allen heads) and remove the brake hose from strut. Secure caliper with stiff wire somewhere out of the way. Remove pad sensor.
3) Remove caliper bracket
4) Remove small allen screw holding rotor on and remove rotor (may require rubber mallet to release rotor from hub)
5) Unbolt dust shield and remove the ABS sensor
6) Remove two lower bolts and one upper bolt/nut connecting the strut to the steering arm/hub . Tie the arm out of the way.
7) support the strut from the bottom and remove the three nuts on top of the strut tower and lower the strut out from the car.

Top Left: Caliper removed
Top Right: Caliper secured out of the way
Bottom Left: Tie rod secured
Bottom Right: Dust Shield ready to be removed

8) So now you should have left on the car the control arm and the steering arm/hub assembly.
If you want to work on the controls arms at all (replace ball joints, bushings, or the entire arm) follow the rest of the instructions below. If not, skip to the next section

Control Arm Removal
1) Remove the bolt holding the sway bar linkage to the control arm
2) Loosen nut holding the control arm to the steering arm/hub assembly. Seperate the ball joint with the pickle fork (note: this will require replacing the ball joint. If you don't want to do this, I suggest buying or borrowing the BMW ball joint removal tool. Mine were worn out so I replaced them)
3) Remove the ball joint securing the control arm to the subframe just like above. (This one is a ROYAL pain to get out)
4) Remove the two bolts holding the control arm bushing carrier and the control arm on.
5) Now drag that control arm to a machine shop and have them press in the new ball joints if you destroyed them removing them and new control arm bushings if you're replacing those.
6) If you plan on replacing the bushings be sure to mark their position on the contorl arm.

Prepping the Bilstein parts for installation
1) If you plan on reusing the strut hats that are on the strut you just took off, you will need to get a set of spring compressors and remove the hat after compressing the spring.
2) Take one of the new coilover struts and thread the two black locators down the coilover. Follow that with the smaller tender spring, the spring seperator, the larger spring, the dust boot, and then the silver upper spring mount. Now put the strut hat you will be using (I purchased newer m3 hats to reduce or add camber as I saw fit). Place the large nylock nut on the strut and tighten it down. You'll need to use some sort of socket configuration with an allen wrench. I used a spark plug socket, a wrench attached to that, and then an allen wrench down the center of the socket.
3) Now you've got the assembly all ready to drop in.

Left: Assembled and ready to go in car
Right: Strut Hat ready to be tightened

Installation
1) If you removed the control arm bushings you are going to want to put them back on now. Lube up the bushing with some dish soap and push it on to the mark you made in part 6. Be sure that the carrier is mounted correctly on the control arm to that it will bolt back up to the car. All the manuals I have looked at on this subject state that you MUST install this and get the car on the ground within 30 minutes. Then leave the car on the ground for at least 30 minutes to allow the bushings to set. I just barely made it.
2) Bolt the carrier back to the car and put the nut back on the ball joint connecting the control arm to the subframe. Remount the steering arm to the control arm. Be sure to use new nylock nuts here. Leave everything a little loose so that you can snug it all down when you've got it all installed.
3) Now the control arm is all set in place and we can put the strut back in.

Top Left: Right side control arm
Top Right: Left side control arm
Bottom: Close up of left side control arm
(note: handedness is determined from the seated position)

4) Bolt the strut hat back in to the shock tower (don't forget the reinforcer if you purchased it)
5) Reconnect the two bolts holding the strut to the steering arm. Be sure to use some locktite on these. Reconnect the bolt and nut holding the top of the strut to the steering arm.
6) Reconnect the steering arm to the tie rod and the sway bar to the control arm.
7) Everything should be connected to the control arm now. Go ahead and torque down the bolts and ball joints.
8) Bolt dust shield, abs sensor, and caliper bracket back onto car.
9) Reconnect rotor and secure with allen head bolt
10) Reconnect caliper with pads and replace sensor.

Torques
Control arm carrier 34 ft-lb
Control arm ball joint to subfram 62 ft-lb
Control arm ball join to steering arm 48 ft-lb
Sway bar link to control arm 31 ft-lb
Strut to shock tower 16 ft-lb
Strut to steering arm 78 ft-lb
Wheels to hub 74+/-7ft-lb

Here it is installed

Rear Removal
1) If you haven't already done so or only have two jack stands raise the vehicle, properly support it, and remove the wheels.
2) You're going to have to take out the RSM so, remove the rear speakers
3) Remove the side liner clips and liner. Then take out the liner around the shock mounts.
4) Jack up the rear trailing arm to hold the suspension on one side while removing the shock.
5) Remove the two nuts on the shock mount (Rear Shock Upper Mounting Nuts) and the top one (Shock Mounting Nut) (see picture below). You might have to put a little wrench on the shaft of the shock absorber.
6) Now that you've got the RSM out, remove the bolt at the trailing arm to release the shock.
7) Lower the trailing arm a little so that you can get in there and remove the drive axles bolts. These should be torx bolts. When removed be sure to suspend the axle with some wire again.
8) Slowly lower the trailing arm until the spring is just about unloaded.
9) Now take the pry bars and yank that spring out of there. Try and be careful though....

Installation
1) Now we can put the spring perch in the upper control arm. The large threaded part fits around the lip at the bottom and then the collar fits up into the hole from the bottom and the huge nylock nut fits onto the exposed bolt. Have fun tightening that.
2) Once you've got the two black spring locators on put the plastic cap on the perch and then the blue ring on top of the black locators.
3) Replace the upper spring pad and drop the spring in. The lower spring pad will not be used. If it's not going in very easily you may want to lower the black locators a bit and then put them back up once you've got it all in there.
4) Now the shock is ready to be put in. The order of installation is shock, spacer, cupped washer, RSM, and gasket. Then fit the nut and washer to the top of the shock. Then refit it to the car and install the two nuts to the RSM.

5) Raise the suspension some and bolt the bottom of the shock back in.
6) The driver axle may now be replaced. Don't forget the reinforcers.
7) Replace the wheels and drop it down. Keep in mind that this thing might be REALLY low now, so you may need to space it with some 2x4's under the wheels or something.

Torques
Shock nut 10 ft-lb
RSM to body 17 ft-lb
Shock to trailing arm 57 ft-lb
Drive axle 47 ft-lb
Wheels to hub 74+/-7ft-lb

Here are a few pictures of the RSM

Holy loss of droop travel Batman!

Now that you've got it all installed you can adjust the ride heights.
Front adjustment is pretty easy. Just raise the front of the car and use the wrenches to move the black locators up to raise the ride height or down to lower it.
The rear is a bit more of a pain. You'll have to remove the wheel, support the trailing arm (you really should unhook the drive axles but I didn't) and then remove the shock bolt to the trailing arm. Now you can remove the spring and adjust the black locators. If you're going to go very far down, I wouldn't crank down on the locators too hard when tightening them or else you'll never get them to move again.

Technical Specifications:

Ride Height:
This is to be measured from center of fender lip to the center of the wheel. That way it does not matter what diameter wheel you are using.
Front ~12 1/2"
Rear ~ 11 1/2"

Alignment:
Note: The car feels very good with no toe up front, but the camber in the front is hardly desireable. I am working on increasing and evening it up.

Front -
Toe: 0 degrees/side
Camber: -0.8 degrees L, -0.2 degrees R

Rear -
Toe: 0.1 degrees/side (in)
Camber -1.9 degrees/side

Update [05.24.03]: I removed the 96+ strut hats and replaced them with the standard mounts to increase camber a few months ago. This morning I installed two shims on the right side to even up the camber. Right now I should be at about -2 degrees up front. Turn in feels pretty quick, but the suspension has to wait for the tires to catch up. Everything feels good though. Tire pressure are currently set in the 34-36 psi region hot up front and in the rear, with a little more rear pressure when cold.

Update [09.21.03]: I attended an autocross yesterday with Team Rose Motorsports with Indianapolis SCCA. I setup the car with the dampers on full stiff up front and two to three clicks off full soft at the rear. I ran the front at 38-40 psi and 36 psi hot in the rear. The car handled very nicely, with a slight push if I overcooked the corner or overbraked and then tired to make up with it with more throttle. I have a little trouble putting down power in one section with in uphill slight offcamber changing to on camber corner on the exit. Then the hill peaked and went back to an off camber corner. Very fun, but the rear wanted to come out. Fun stuff on the last run of the day, but not the fast way around. Thanks to Nick Snyder for the tips on the rear end adjustments to help lay down the power. Although, it's nothing an LSD wouldn't take care of. The slaloms felt great. Everything must have been on as I managed to win STS class with a field of 9 cars! Not too bad for only a handfull of autocrosses.

Update [12.16.03]: Around the end of November I had the car up on the lift and checked the rear bumpstops to see if they were still intact. Harris Yong had a probelm with tearing them. Lo and behold, they were torn. So, off they came and I sent them back to Bilstein. The stock shocks went back on the car until I could get them back. I paid shipping to and from and the lifetime warranty took care of the rest. They just came back today. I'm thrilled with the service. It wsa a little snow, but they included nut nylock nuts for the top of the shock and washers for the lower bolt (hmmmm why the HELL didn't they come like that from the originally!).

I think the bumpstops just aren't large enough to hande the loads they see from bottoming (though I've never noticed the car to bottom).

As far as how the car drives with the stock shocks, it's fun. There not a whole lot of damping in the rear, so a quick transition leads to some fun tail out driving. Given a smooth input, the car still turns nicely, but powering out of a corner gets a little squirrely.

Update [04.23.04]: After installing the subframe reinforcements, the ride height was raised. After trying to use the wrenches to adjust the rear perches I decided to call Bilstein as they seemed frozen. I thought about heating them up a bit and having at them with a hammer and punch, but decided to hold off. What did Bilstein tell me? Get out the torch and hammer! SO I did and it worked. They would have taken them back if they truely were frozen, not bad! Anyways, I think I've got a leaking rear right shock. Warranty instructed me to clean it off and drive it for 2 weeks. If it's covered in oil again, then send it back. I think it'll be getting sent back in 2 weeks! What tipped me off? Wheelhop. I've never gotten it before and I have recently.
Thanks to Zygmunt (Bimmerparts.com) where I purchased the PSS9's. They're sending me another copy of the receipt because I've lost mine and Bilstein wants a copy for the warranty of the shock.

Update [05.04.04]: I haven't gotten any more wheel hop recently. I wonder if it was just a freak occurance. I've reset the ride heights to 12 1/4" up front and 11 3/4" out back. I also have removed the tender springs. No more need for spacers up front and plenty of room for larger tires. With these ride heights, the spring is not compressed at full droop, but that only happens when the car is up in the air.

Update [05.12.04]: I've had enough of low ground clearance and worrying about if my car will be able to pass over objects in the road. Besides, it's time to make room for bigger rubber.

Ride Height Specs:

Front: 12 1/2" (I may go up to 13" in a few days)
Rear: 11 3/4"

Update [05.14.04]: I finally settled on some ride heights

Front: 12 1/2"
Rear: 11 3/8"