As a previous owner of a 2007 RS4 Avant for 7 months, 7000 miles @ 16mpg.........I feel fairly well qualified to speak about it. It is an amazing car, but and it's a huge but, it drinks fuel like its going out of fashion, brakes are £2k a set, and you need the Audi warranty, just in case the worse happens. They do not make the quoted BHP, but still manage to hit the quoted figures on the road, they are hugely fast, have great road presence and I'd have another one in a shot if I could justify the fuel costs! It was a great car, and makes even a poor driver look good. Just google some reviews and you'll see that it's the best RS car Audi have ever built.
I suspected the M3 has fairly similar running costs, but for me personally just don't look as special - that's not to say I wouldnt have one though. It's a shame they don't do a tourer........
I think its best you go and take both, for an extended test drive and make up your own mind.
Good luck