It means a 200+ Horsepower, smog-legal car that will comply with current and future smog laws. An 'M2' can be modified to produce over 250 hp while allowing street-able performance, smooth idle, and easy starts every morning. An S14 conversion will add less than 100 pounds to the weight of a 2002. (about 10 HP per 100 lbs)
The S14 M3 motor is nearly bullet-proof. Many E30 M3s on the road have over 150,000 miles and are still making very good power and remain good daily drivers (and occasional track cars). The Motronics ignition system is relatively simple and keeps the motor running smoothly all the times. Just change the oil and spark plugs, and adjust the valves every 40k miles.
The S14 M2 conversion is approximately the same cost as building a high output 2002 motor. The total cost of completing the M3 installation in a 2002 will range from approximately $6,000 to $10,000, depending on who performs the labor, the cost and completeness of the used M3 motor purchased, and the cost of the conversion parts and supplies.
Ease of Installation
The M2 conversion kit is designed for the individual who is has a good mechanical background, and who likes to and succeeds in making repairs to Bimmers. Nothing fancy, but if you can repair brakes, change shocks and springs, wire stereos, replace a clutch, or change a differential, then the M2 conversion is something you can probably handle.
The conversion requires standard tools, and no welding or parts fabrication is necessary. The kit is designed for the shade-tree mechanic, so it is easy to understand, without too much technical information.