[jpk]

Funny - I had both as leased cars covered by the company car allowance. The '07 was a bit nicer and less quirky inside (more of a GM-influenced dash)
I really enjoyed driving those cars. Both of mine were manuals. the early car was the 175hp turbo, the latter was the 210. Power off the line on either was pretty comparable, the difference was that the '03 would run out of steam (boost) at about 4500 rpm and kind of fall flat on power, while the '07 with the bigger turbo would pull hard right up to 6k. The chassis dynamics are very good and they just felt better to drive that the 3-series I was also considering at the time (of the first one).
I had warranty coverage while I had them. I didn't have to take it to the dealer for anything other than the covered maintenance (oil changes). I think they also did a couple of ECU updates while they were there.
That said, I don't think I'd be comfortable having one as my daily unless I had a backup and could do without the car for a few days/weeks. Parts availability is really sketchy. Also, they are definitely not DIY friendly other than oil changes/brakes kind of stuff.
I've heard horror stories of control modules failing leaving the cars inoperable. Without a solid dealer support and parts network behind them, that kind of thing really scares me away from considering another, even though there are great deals on them. I'll stick to audi for now.