The secret of a better handling of your Bmw E34 is on the suspension: shocks, springs and sway bars.

Check here for Touring Suspensions.

Shocks

Stock ride: Boge shocks, Koni.

Firmer ride: Blisteins HD or Sport, Boge turbo gas, Koni.

Sporty ride: Koni shocks (adjustable), KYB shocks.

Sport (shorter piston) or Heavy Duty (HD) shocks ??. Many ressellers say that the valving of the E34 bilsteins is the same on the HD and the sport. (Thanks Jeff Nord)

There is a long held myth about so called lowering shocks or shocks designed for lowering springs with reduced travel versus shocks designed for standard or taller springs. The best way to visualize it without physically looking at the shocks side by side is...the only tangible difference is the stroke is shorter in a shock designed expressly for a lowering spring...the throw is shorter. Full jounce position or fully compressed shock position is exactly the same...that is the critical factor for bottoming...wh ere the jounce bumper fully compresses onto the top of the strut collar nut threaded onto the strut housing...that shoulder position is the same for either shock and each shock will identically compress into its cartridge casing. With a standard Boge shock lets say..the throw of the rod internal to the shock is a bit longer..that's all...so the shock is cabable of "extending" farther...at full suspension rebound or when the suspension arms are fully down with a taller spring. With a shorter spring..you don't need a longer throw shock...however..this is the important part...Is putting a standard Boge with longer travel with a lowering spring bad? Absolutely not...you just end up not using the full travel capability of standard shock with a shorter lowering spring... that's all. All the speculation of a standard shock..say Boge..wearing out faster with a lowering spring...is a myth. (From George Mann)

The KYB shocks are cheap and you get what you pay for, they are stiffer than the springs!!!

Picture from: http://www.mwrench.com/wishbone/

Aluminum control arms are available for the E34, E32 and E31. There is two models, the E34 model with a rubber bushing and the E31 model with a spherical bearing.

31-12-1-138-477, 31-12-1-138-478. Are the control arms part# for the E31 models.
BMW designed the E32 wishbones with a spherical bearing instead of a bushing on the inner end!

Make sure that you receive the right part when you order it. (The bushing alone doesn't seem to be available from BMW, RacingKing.net is looking to get some manufactured.)

Springs

There are lot's of different spring manufacturers, the most popular are:

H&R: Moderately stiff ride. (1.3" front - 1" rear)

Eibach: Moderately stiff ride. (1.3" front - 1" rear)

Racing Dynamics: Slightly stiff ride. (1" front - .75" rear)

Bavarian Auto: Close to stock ride. (1.3-1.5" front - 1" rear)

Dinan: Sport spring that almost doesn't lower the car.

M5 springs: front works with any E34. Rear will not work unless you have a self-leveling suspension.

Sach "sporting" kit: bodge turbo gas/Shach spec Eibach springs, not as stiff as the bilstein/Other spring combination. (1.25" drop front). It seems that on the 540i, it created a drop of 2" front and 1.25" rear...

What shocks with what springs, form the less stiff to the stiffer ride:
Original ride: Original springs or Bavauto springs with Boge
Slightly stiffer ride: Original springs or Racing Dynamics springs with Bilsteins HD.
Moderately stiff ride: H&R or Eibach or Racing Dynamics springs with Boge.
Moderately stiffer ride: H&R or Eibach or Racing Dynamics springs with Bilsteins Sports/HD.
Adjustable stiffness: Dinan stage I (tiny drop) or use Koni shocks (expensive).

Basically if you want to lower the car and keep the OEM ride, go with the Bavauto springs.

Sway bars (anti-roll bar)

Sway bars tie the lower suspension components together accross the front and the back, they affect the car oversteer and understeer. Bigger sway bars improve stability while cornering, the best setting is fully soft for the front and hard for the back.

Stock: Front: 23mm - Rear: 15mm.
Sport suspension: Front: 24mm - Rear: 18mm.
M-Technic suspension/US E34 M5 3.6: Front: 31 35 2 226 333 - 25mm Rear: 33 55 2 226 507 - 18mm
Eibach: Front 26mm - Rear: 13mm. (yes, I called them to confirm)
Racing Dynamics: Front 27mm - Rear: 19mm.

The later model Euro 3.8L M5 had a different front bar, that from all reports was stiffer than that provided in the 3.6L models (although it was the same thickness). These were standard on M5 Tourings. Front: 31 35 2 227 276 - 25mm bar from 3.8L M5 & M5 Touring.
The later Euro 3.8L M5's (after 6/94) came with a larger rear bar. These were standard on M5 Tourings. Rear: 33 55 2 227 005 - 19mm.

Also there were Nuerburing (BMW's spelling) rear swaybars for the M5 Touring. These were the biggest rear bars ever offered. These may be the perfect complement to the 27mm bar offered by RD as their front rear ratios are highly biased to understeer and these may improve the situation somewhat. Rear 33 55 2 227 416 - 20mm

31 35 2 227 276 $118.00 (m5t front)
31 55 2 226 334 $6.00 ea. (mounts)
33 55 2 227 005 $108.00 (m5t rear, 19mm)
33 55 2 227 006 $4.00 ea. (mounts)
33 55 2 227 416 $124.00 (N'burgring m5t rear, 20mm)
33 55 2 227 240 $4.00 ea. (mounts)

With a 20-25% parts discount offered by several BMW dealers in Roundel, and considering that rubber bushings are available from the factory (much quieter and transmit less vibration), the factory bars are a pretty decent choice without being prohibitively expensive. However, there is a time factor to getting these items as they have to ship from Germany, those ordering the Euro parts will have to be patient...

Information provided by Phaedrus

They link the two opposite strut towers together. A good strut brace is design to reduce the flex in the strut towers when the car is in a corner. The flex is greater if the car is lowered.

A well designed strut bar is a must have if you track your E34, it will improve the chassis stiffness making the the steering quicker and more responsive... Perfect for the autocross.

Ok, why do I talk about a well designed bar?
The best bar would have no link to it and shouldn't be adjustable, because you want NO flex in the bar (it kind of defies the purpose). Else you will just buy a worthless piece of engine jewelry.

Thank you George M.