So often we want to make our car as fast as possible, but still be usable on the street. However, if we were to do this, the car would be very twitchy and wear out tires in no time. So, we have to make a compromise.
We have found that with 200 treadwear tires, you don't need to go to the extremes of alignment setting to be competitive. A widespread myth is that camber kills tires. This is not true. Toe destroys tires. Toe, combined with camber, really destroys tires.
The BMW platforms with a Z-Axle Multi-Link rear end have a ton of rear grip from the factory. Unfortunately the camber curve of the MacPherson strut design is just awful on the front of the E46, and its biggest enemy. Hence why BMW Motorsport always used monster front anti-roll bars.
So what we recommend is the very conservative toe values. 1/8" toe-out on the front, and 1/8" toe-in on the rear. This allows the car to respond quickly and confidently, while not toasting your tires prematurely when matched with the camber it needs to really whip around the track.
Camber is a drivers preference a lot of the time, but we like starting at -3.5 degrees in the front. You might think to yourself this is excessive, but matched with the conservative toe value, its works very well. The E46 also needs a lot of camber to combat the front tire fold over, which turns the car into an under-steering plow, so keep that in mind. The rear is generally safe around -1.5 degrees. The rear squats and toes in under power, adding grip naturally. As you add more and more power to your build without adding tire, reduce camber for more contact patch. However if you have good rubber underneath you and find you need more rear grip through the middle and exit of a corner, add some more negative.
So yes, it is possible to have a compromise. It is easy to build a track car. It is also easy to build a street only car. What is truly hard, is to build something that can do both, as it requires balance and compromise throughout.