This is an issue which sort of cropped up on the BBC's Top Gear programme yesterday, when they tested the BMW M3, the AMG Merc C63 and the Audi RS4 against one another on a track in Spain, weighing them up against a 70s F1 racing car which also had around 400 bhp, and of course they discovered what is rather obviously going to happen in such circumstances: the AMG Merc (with the most bhp - i.e. about 45 more than the M3) was only a gnat's whisker faster than the others and was considerably tougher to keep on the track:
http://www.bbc.co.uk/topgear/show/ep...pisode10.shtml
The upshot was that, despite liking the mad engine of the Merc, they all though the M3 was a better package. If you like straight line speed, then obviously more bhp is good, providing it can actually put the power down on the road before the chassis twists itself in half, but if you want something that is actually good to drive, a bigger engine isn't the only criteria.
Chock