They are two different cars.  The Z4 is not practical but it will be a
"weekend" car and not an everyday drive.  The 3 series would be my second
choice although there is  not much room in the back seat.  My third choice
would be a X3 but I don't like the expense and maintenance associated with
AWD regardless of the improved handling.

I would get the auto. From test drives, BMW autos seem pretty good to
me. I would suggest staying away from the SMG. I had a 2004 Z4 3.0i with
the SMG and although the technology was cool - I am a bit of a geek and
like that kind of stuff - it was not very smooth shifting. I would say
it is one of the reasons I traded the car in so soon (that along with
troubles with the top and wanting room for more than 2 people). I now
have a 2006 330i with a 6 speed manual and I think it is a much better
automobile all around.

Anybody have a preference of automatic over stick?

I will be buying a Z4.  I want an automatic because 1) I will not be driving
it like a race car and 2) the advances in automatic transmissions make them
as reliable as manuals and 3) I have been driving autos for over 30 years
and am ready for a change.