Differentials for the Regular Manual Transmissions
Because of the significant increase in low-end torque it because advantageous to install a lower geared differential into the 335i.  Using the standard (non-sport) 5-speed manual transmissions use the following guideline:

In the case of the 3.73 Diff, the 335i would have an RPM restricted top-speed of around 225km/h (about 140 miles/hour). The acceleration of a car equipped with such a differential would be very impressive, but at the cost of top-speed.  In the lower gears the torque-band would be used up very quickly (the M30 is not a high-revving engine). Beginning with 3rd gear the engine would pull for longer. 

With still a lower gearing, say that of the a 3.91 or even 4.10 Diff, the 335i will accelerate faster still.  Such gearing may surpass the traction capabilities of conventional tires.  The use of 1st gear for regular street driving becomes all but null...

A 3.64 diff is seen as a reasonable compromise. This option would provide a top-speed of about 235 km/h (about 146 miles/hour) while still providing very respectable acceleration.  With such a setup a 335i should sprint to 100 km/h (about 62 miles/hour) in about 6.5 seconds. 

The use of a 3.45 diff is yet another popular choice.  This differential is seen as an excellent choice for the car that is to be a daily driver, but driven by a driver that still desires break-neck acceleration and is willing to put up with slightly increased highway travel revs.

The 3.25 is recommended here as the best choice.  With this setup the most is made of the lower gears.  Here 1st gear can be extended to its full potential.  This differential was used in many 535i's (among other cars of the era) and can be had at a relatively low cost.  Also, this differential is often to be found in the limited slip variant, which is indeed very desirable.

Higher still, the 3.07 diff can be found in many e23's as well as a number of e30's.  This differential can be used in the 335i without any problems, however it does not produce an amazingly fast result.

Differentials for the Sport Transmissions
If a sport transmission is to be used another step (or two) higher is recommended.  Differentials such as the 2.93 are easy to come by, and very well suited to this application. Alpina went a step further with its B6 3.5  using the 2.73 diff. This differential provides a rather long 1st gear, but the ratios of all the others are very enjoyable.

Limited Slip or Not?
Because of the abundant torque of the M30 a limited slip differential is very desirable.  Limited slip diffs can be distinguished by the "S" marked on the housing.  The e30 M3 came with such a differential with a 25% lock-up ratio.  However, in these older differentials sometimes the functioning of the limited slip isn't as strong as it should be.  The wheels can easily be be rotated independent of each other when one of the car's rear wheels is jacked up.

A limited slip differential will produce better traction on loose surfaces (gravel, snow, etc) and improved acceleration.  This acceleration is most easily noticed when exiting turns.

Questions, Comments?