Features: What makes PG differentials better? Well, start with this: At Precision Gearing, we have over 40 years of experience, both on and off the track. Because we understand the rigors or racing and value trouble-free performance, we use new, quality parts and materials in our differential builds - Timken bearings, OEM BMW seals and dust covers, MIL-SPEC hardware and more. PG diffs are race-proven. All our products have been developed under the most punishing conditions - the race track. Check out our customers in the Gallery - the real deal. (And please - don't trust your diff build to a boneyard guy who's never been behind the wheel.) Ongoing development, Billet CNC Parts, MIL-SPEC Hardware. With an eye on performance and feedback, we're constantly upgrading and refining our product. You're assured a strong, reliable differential. For example, we found that on the E36 chassis, there's a tendency to sheer off the front diff mount bolt. We've solved this issue by installing a larger diameter military grade bolt. All of our E36 differentials include our front mount upgrade. Another improvement we've made is using all military-grade hardware throughout our differentials. It's another reason why our differentials perform and last (and why we offer a 5 year warranty). And we're now manufacturing billet CNC parts to address other issues we've seen in the factory BMW units. Our new billet steel spool cover (photo to the right) is used in all our high-lock builds (some factory spool covers were sheering off - ouch!

BMW Differential Types.

BMW makes three sizes of differentials: 168mm, 188mm and 210mm. Typically, the 4 cylinder cars are equipped with the 168mm, 6 cylinder cars are equipped with 188mm, and V8 and V12 cars are equipped with 210mm diffs. There are some exceptions like the E46 M3 and E36 M3 euro which have a 210mm diff (though both are 6 cylinder cars). Each size has a number of available gear ratios [see chart].

Limited Slip Differentials (LSD) - How to determine if your car has one.

The easiest way to tell is to jack the rear wheels of the car off the ground and rotate one of the wheels. If the wheel on the other side rotates in the same direction, chances are it's a limited slip differential (or 'LSD'). If the wheels rotate in opposite directions, it is probably an 'open' non-LSD diff.
The only way to know for sure is to remove the rear differential cover and look at the spool (ring gear carrier). An open diff will have exposed spider gears, and LSD will have an enclosed unit. The limited slip diff was an option on all BMW cars until 1996, when BMW decided to only have LSD in Motorsport cars.


Source - http://www.precisiongearing.com/differentials.html