M3s have fragile transmissions for the power? I was at a drag strip recently and several cars had transmission failures. I'm trying to remember if an M3 was one of them.
Definitely not the manuals, from any anecdotal evidence I have in my inner circle.

The SMGs, on the other hand, are another story. They are pretty horrible in the E60 M5 in particular. I used to lurk in Bimmerpost and M5board when they came out.
Were these failures M3s, M5s, or some other model (Z3-M, Z4-M, ect?)? I know that the SMG gearbox has made appearances on both the M3 and M5 for a few generations now. To my knowledge, that's where the failures lie. AMG uses a really beefy, modified version of their 7-speed automatic with multiple clutches and no torque converter:
http://en.wikipedia.org/wiki/Mercedes-Benz_7G-Tronic_transmission. I have yet to read of a single failure on the interwebs, and lord knows I've been looking! People love to complain that this transmission is not as quick to shift as the dual-clutch unit in the current M5, but I'd personally rather have the AMG transmission with its better record for longevity. Here's hoping that the coming DCTs from AMG are as strong as, if not stronger than, their mutant automatics of yore.
But the E90 M3 was, at one point, the most reliable sports car in Consumer Reports.

That was like three years ago, and I'm not sure how it's fared since.
Aside from trannies, VANOS has always been a problem, esepecially in older models (circa E46).