BMW vs AUDI - El Capitan
I'm after a bit of advice if possible from anyone. I know the BMW v AUDI argument is age old but I'm after buying a new motor and I'm stuck between a BMW 3 Series Coupe (2ltr, 320i) or an AUDI A4 Saloon.

I'm not strictly in the market for just these models, in fact I've never owned a BMW, but I'm told these are good options for the price. I cant say I know too much about cars but I'm currently driving an AUDI A3 which is a good car but too small for my needs.

Is it correct BMW's are a better drive?

Anyway, to refer to the original question if given the choice...BMW or AUDI?
BMW vs AUDI - LikedDrivingOnce
When I bought my car the final choice was between an Audi A3 Sportback and a BMW 320d Touring. I also tried an A4, but I needed the practicality of a rear hatch so I had to rule it out. Even though Audis seem to be the fashionable choice these days, I found the BMW to be just as good in all respects. And the torque, smoothness and fuel economy of the BM made it a marginally better drive. (Both very, very good though)

Fast forward to the choice that you present here, and I would go for the BMW 3er Coupe. In normal day-to-day driving you probably wouldn't notice much difference over the Audi, but it looks classy and elegant IMHO. For some, the fact that it is RWD will be a plus as well, though for others (including me) my experiences with RWD make this the only point that I'd be worried about.

OTOH, the A4 is not exactly ugly, and is slightly more practical.

You can't lose though, if you are lucky enough to choose between these two cars.

(You could also consider an A5 Sportback - looks, practicality, quality, and you can get a quattro version .....drools over keyboard)
BMW vs AUDI - Avant
I think this one depends on your driving style.

BMWs have very quick responses in the steering and handling departments, and suit people who like to press on and use as much of the available power as possible.

Audis suit a more relaxed driving style: they are always criticised by road testers for lacking 'driver involvement' - but you have to remember that most road testers are young men who see it as their job to test a car to its limits (it is, but it isn't necessarily the only part of the job).

I should warn you that if an Audi A3 is too small for your needs, so almost certainly will a 3-series coupe be. The 4-door 3-seres is more directly comparable with the A4, or there are the Touring and Avant versions which are 'lifestyle' estates.