I got a chance to drive an S3 recently... here are some of my opinions-
The Bad-
1) The interior is quite low rent... it bothers me that it is a 50k car with an interior pulled out of a Golf. The middle AC vent design just infuriates me...
2) The car as you mentioned doesn't make much noise in whatever mode it's in.
3) The car definitely has a hint of understeer, i took a 90 degree turn harder at about 30 miles an hour and could already feel the car plow rather hard, its' a little scary at first... this is the cheaper Haldex FWD based AWD system at work, maybe wider tires up front would help.
4) It's just a tad slow... not very slow, but something like an APR stg1 would probably wake it up.
The good -
1) The car feels quite light, it hides its 3400 lbs very well, maybe its the awd system working, but it feels very go cart ish... this is a great thing.
2) Launching the car and driving around in stop and go traffic is very fun, the car is well balanced for the power that it
actually does have.
3) The tech is solid, the digital dash is really cool and has very high resolution.
4) They don't come with runflats, this is a huge bonus over any BMW non M car... I promised myself I would never in my life buy another car with runflats on it from the factory.
I think overall, I would never pay 50k for this car, but considering one can be had used for 32k with CPO, it changes the discussion completely. I wouldn't mind having one as a daily driver, I would just need to change up the tire setup a little bit and throw a light tune on it...