Suspension, steering, wheels
In the 1970's the E21 was known for it's sporty suspension and good handling. Nowadays we'd call it plain soft. If you want to improve without changing the ride height try fitting new OEM springs or new Motorsport springs which only lower abt 10-15mm, both still available from your local dealership but not cheap anymore these days. Combined with good and fresh shock absorbers this will give you ok handling. Mind you, ok handling for a car that's over 30 years old.
A good upgrade are springs like from Apex and H&R, lowering 35-40mm. When fitting, check shocks and also check strut top bearings for freeplay/wear. There are enough good shocks around, most popular are OEM quality Sachs or Boge, uprated are Bilstein or Koni.
1. Many speak of an E21 front shimmy, usually caused by worn front trailing arm and anti roll bar bushes which isn't too hard to fix.
2. Front end knocking sound most times is a result of a worn upper strut bearing and usually becomes apparent after changing the shock inserts or springs. So when you are taking a strut apart, decompress the spring and have a feel before dismantling the rest. Give extra attention to the sequence of the o-rings around the top bearing, affects wear and steering!
Click here for a thread with tips on replacing front shocks and dismantling front struts
Replacing rear wheel bearings
Power steering was optional on all models. Manual and power steering racks are the same for all models, the only differences to be found are between the PS pump and pump brackets, various versions around. Other parts are identical.
Power steering fluid: ATF D2 system Dexron
Steering racks from other BMW models do not fit.
Wheels and tyres
Although the E21 was on 13" with matching 'balloon' tires originally, limited availability of 13" tires and more modern expectations regarding handling have most people switch to 15" tires. Most important is to have the right ET or offset, about 18mm for 5.5J wide wheels and max 13mm for 6-7J wide wheels (most popular E30 alloys therefore have an incorrect offset of abt 24mm requiring spacers which in turn limits tyre width). As it's a tight fit for instance with tie rod ends and brake calipers, always fit a wheel front and rear to make sure they can turn freely before buying! Regular tire sizes: 195-50/15 front and 205-50/15 rear. For stock 13" sizes please see the specs pages. PCD (lug pattern) is 4x100 mm.