i think a V6 would run rings round a TD (btw Racing an old tractor engine like that BMW 2.5 engine it isnt a Common rail tuned engine racing it certainly will blow it up)
the economoy is very similar and i would rather have the V6 i bet the V6 would be more reliable too
that BMW engine is very overated anyone with BMW specialist experiance will tell you lots of bad things about it!
Racing it won't damage it purely because it isn't common rail - in fact some say the old style injectors are more robust than the common rail types. You may struggle to get the same ultimate performance, and certainly not the same economy, but both are equally prone to self destruction, as mechanically very similar.
Chipped, the economy is better than unchipped. Personally, I don't think the engine is suited to GM autoboxes, as they really do seem to sap the mpg when used in conjunction with this unit. In manual form, its a good package, both power wise (slightly less than 2.5 v6) and economy (way better than the v6). If I could get a 2.5TD manual Elite saloon, believe me, I would be MV6-less

You're right about its rating though, it is overrated, and when it destructs, it does so pretty spectucularly (probably due to previous poor servicing - its prone to blocked or restricted oilways). Its certainly not a bad engine, people think because it says BMW on the side that it is something special when it is not. It suffers all the usual problems we expect from BMW engines.