I heard that you could use the e28 5 series front struts, which will have bigger brakes, and it will up you to a 5 lug pattern from a 4 lug...if you want to go that route.

Or, you could just upgrade your stock system - I've got Zimmerman Sport rotors with PBR Organic pads (I can stand on the brake, and it stops faster than my vette) - if you just upgrade the rotors to Brembo or Zimmerman, the stock size, go with a cross drilled rotor, and a Hawk HPS or Pagid Blue pad - you'd see a world of difference, even if you just upgraded the pads on the stock rotors.  Getting a big brake kit is the best way to go, but that costs over 4k, and has a bit more weight.  Also, a good idea is to add some brake ducting, which I've seen so often, just to force cool air directly onto the rotor, it's the buildup of heat and gasses that build up between the rotor and pad that cause brake fade, and on a budget, go for the cross drilled rotors and a pad upgrade - if you're ready, get the SS lines.

Are you experiencing brake fade?

I'm not sure about the smoke...

I got a suggestion from a friend today, who actually is a BMW mechanic and crews on race teams / drives. 

Best solution for you, on a budget - stainless steel lines, upgraded pads and ducting - forcing cool air directly onto the rotor.

I think that BMP Design sells the ducting kit for the e30, but you must remove the front hubs/bearings and pull the splash cover to install this mod.

Always upgrade the "whoa" before upgrading the "Go" - you have to have enough or more than enough power to stop.

what do you need done to the suspension - and where are you?

racing dynamics sway bars - 22mm front, 19mm rear.  camber plates - usually sold by Turner Motorsport, over $300.00, bilstein sport shocks(for lowered springs), racing dynamics front/rear strut braces.