first thing suggested would be to have the valves adjusted, new ignition including sparks, wires, rotor and cap, do your regular maint. stuff like flush coolant, new synthetic oil, larger oil filter, new air filter, refill drive line with Red Line fluids (tranny and differential), and ... thats about it for quick stuff to get your car to running like it used to for cheap.
change the chip is probably the most cost effective. replace intake with cone filter AND heat shield (the one from Lucasbmw.com is the best). for a little more, you can get an Ansa free flow muffler.
my opinion though, is not engine performance, but suspension and braking. stiffer bushings, sway bars, and struts and springs are key for suspension. stainless steel brake lines, new fluid, and pads are highly recommended for brakes.
after that, its straight to power plays, but its recommended that you make sure things are in top shape for a 20 year old car. (clutch system, brake system, sway mounts, strut mounts, ball joints, sub frame mounts, shift linkage, fuel, oil, coolant pumps, etc.
have fun