Coilovers are the best option IMO. Bang for the buck it is very hard to beat a pair of Koni race front coilovers using off the shelf Koni race 8611 D/A cartridges in shortened stock strut bodies. I did this for my E36 M3 and I am working on the specs for my S197GT as we speak. This is superior to the GC Koni Sport based struts in terms of damping quality and range of spring rates you can use with them and if you can do the basic measurements and work with a Koni authorized service center they won't cost much more if at all than a full GC kit if you use the OTS Koni Sport rears. They are also double adjustable meaning you can also set the bump damping separately from the normal rebound only adjustment. The Koni Race damper line also supposedly uses a better valve system than the Koni Sport damper line.
Just a thought.
