James Ruppert:drove an early one and it seemed rather grim, better to have an MG TF.
Suprised to read that James. When I bought my first Z3 I also tried the MGTF, I couldn't stay far enough from one. Ghastly thing it was, and the dealer really couldn't be arsed to even try to sell it to me. OK, it cost a lot less than the Z3, but boy did it show...and didn't even come with a lovely 2.0l straight six, either.
The S50 had the engine problem, with the VANOS unit, so if you are in the S50 price bracket then look out for cars with the VANOS replaced. Good history too. Doesn't have to be BMW, a good indie is fine - do some research in that regard. And be prepared to travel to find the right one.
My preference though would be for the M Coupe (which I am currently on the look out for myself), rather than the M Roadster.
There are plenty of people that do use them as daily drivers. How you view the costs really depends on the view you take on these things and how you drive, of course. I use my Z4M daily and it is just fine. I get reasonable fuel consumption and my tyres have passed 20k with still some way to go.