One of my local Audi mates moved from an S3 8P to an RS4 B7 and back to an S3 8P.
Whilst he found the extra space of the RS4 really useful for lugging about his kids stuff (and road trips) he said it never really felt that quick against his modified S3, and he couldn't get reasonably priced mods to make the RS4 quicker. When it came to servicing it (brakes / consumables etc.) the RS4 was very heavy on the wallet, and be said for the extra you got in the RS4 (road presence / sound of V8 / space) he didn't feel he could justify it over the S3, so he bought another S3 and stage 2+ modified it.
We drove the RS4 Avant on the Audi experience day, granted it was the newer one, but in a comparison to the RS 3 it did not feel any quicker to be honest, only thing about the newer one i found was it was a 'nicer' place to be, super sports seats were very comfortable vs the buckets we have, also there was more technology in the newer car, obviously this will change when they unveil the 'new' RS 3.
Saying that i suspect the B7 RS 4 interior wouldn't be a million miles away from the RS 3's then there is the little issue of RS 4 vs RS 3 fuel consumption, I think the 3 is pretty good on fuel for the performance it offers and you never get tired of that 5 cylinder engine note..........
and we will ignore the lunched gearbox at 8-10 grand to replace
the rs4 has a lot going for it but IMO the engine is very poor for a real world car, it's just dead low down in the rev range were as the 3 just takes of pretty much from stand still
when your on it the V8 is even better than the 5 pot but most of the time I live in the lower rev range, the V8 makes much more sense in the R8 but even then micras can out drag you if your not awake, the AMG V8 is vastly better giving you instant shove and top end grunt
The b7 V8 also suffers from valve coking, lots of articles on it
The next one should be a bi turbo v6 which should pull like a train from 1k
Its it's a trade off low down grunt and better mpg or a car that's laggin like an old school turbo but with a nailed down front end