It has been my experience that Sachs twin-tube dampers seem to lose their 'edge' around 40-60k miles.
The 'edge' is seen mostly in low frequency movement (transitional roll stiffness felt as 'platform' or that 'flat' cornering feel). The mid to high frequency movement (basically about 95% of all bumps) do not suffer as much, and is the reason why 3ZHPGUY experienced what he did with the stock dampers. BTW... its a perfect example! My ZHP is at 65k miles and I'm planning on replacing the stock dampers on all 4 corners this year, but only because I want it to be 'right'.
On any enthusiast vehicle, the discussion is as old as dirt... Koni vs Bilstein vs Stock.
For most of the cars I've ever had, the answer was Bilstein. When they get the damping "RIGHT", there is no need to even consider another option.
Unfortunately, it has been my experience that they did not get it right for the E46, at least with stock sport springs. Long story short, the problem is with the rears. The damper's shaft and piston diameter are not large enough to offset axial loads and fail. The remedy is to use the rear shocks from the E36 M3. They ride smooth, and do not fail.
SO, just had to get that out of the way as the question was in regards to the Konis. The FSDs are solid dampers that have what I would call a 'selectively digressive' damping characteristic. They are smooth as butter (smoother than stock) but they realize when they are being 'driven' hard and 'selectively' adjust damping to provide more platform (flat cornering feel). The ONLY problem with this is when you throw the car into a corner and that corner has a nice fat quick bump in the middle of it. At that point, the chassis becomes under-damped and the result depends on how much throttle you are applying at the time. If you are heavy into the throttle, it could be understeer (front tires lose the tactile feel of the road and slip) followed by oversteer (rear tires unload, spin, then gain traction... or maybe they don't). Just don't lift. LOL
Ok... so the FSD isn't without compromise, but it is an excellent damper if you are just knocking about your daily grind and possibly do some HPDE days on occasion because your track-rat buddy with a Spec Miata drags you out (or possibly one of the ZHP Imola Elitists). HA!
That being said, if you are a person that is a bit more in touch with your ZHP than the average enthusiast, consider the Koni Sports.
They are about the closest thing to an adjustable Penske or Ohlins damper that you can get right off the shelf. Consistent, adjustable damping is the name of the game. Whether you are using stock springs or go more aggressive with stiffer lowering springs, they work with a twist of a knob (or damper tube in case of the rears). How do you know if the Koni Sports are right for you? If you like a taut (not rough, not floaty) characteristic to the suspension that feels like its ready and willing to hit the corners at the drop of a hat... Koni Sports are the right dampers. If you want to tweak the way the suspension responds, Koni Sports are for you.
The Bilstein HD, Bilstein Sport, Koni Sport, and Koni FSD dampers will likely be the last ones you buy for the car. They last longer than stock, and each of them bring a different feel to the table. There is no wrong answer here, unless you feel that BMW got it right with the stock dampers. This car is one that BMW, IMHO, did get right. The only issue I have with the stock dampers is that they don't last longer.
Overall:
Koni FSD is probably the most mild of the 'sport' oriented options
Bilstein HD/Sport (e46 front/e36 M3 rear) is a super sweet setup, but has the highest cost
Koni Sport is for the enthusiast that likes to tune the feel to the way they think it should be
Stock is for someone that doesn't mind replacing the dampers a bit more often (no lifetime warranty, whereas all of the aforementioned have lifetime warranties)
I'm a suspension nut and love talking vehicle dynamics. Always love to help!
Good luck man!
Matt