ok. So this is a massive subject area and I'm not even going to try and explain it all in one post
I will start off with some excellent info by the owner of the hondaswap forum: Brian Cummiskey (OK, so he is naming Hondas but this is totally irrelevant. The principles are identical for your BMW):
Static and Effective Compression
A debate that often is pondered by not only Honda enthusiasts but all import performance enthusiasts is whether one wants to go the N/A route, or boost with a turbo or supercharger. While each has their own benefits, debating this is out of the scope of this article. This article is about how boost adds power, beyond the saying "it adds more air to burn". We all know that motors use compression to make power. For example, a B16A makes 10.2:1 or 10.4:1 depending on the year. This is known as static compression. In this article, we will introduce what is known as a motor's effective compression and explain the differences in choosing a proper static compression ratio for boost.
Effective compression is the sum of the static compression, plus the additional compression added to the cylinder by a turbo or super charger, or any other forced induction tool for that matter. Effective compression is defined by the following formula:
E = C((B / 14.7) + 1)
Where E= Effective Compression, B= boost psi, and C= Static compression. Also remember that 14.7 is equal to 1 bar of boost.
Let's do an example. Let's say we have a B16A bone stock with 10.4:1 static compression who slapped on a Drag Gen III turbo kit and is now boosting 7psi. That takes care of our variables. Let's do the math.
E = C((B / 14.7) + 1)
E = 10.4((7 / 14.7) + 1)
E = 10.4((.476xx) + 1)
E = 10.4(1.476xx)
E = 15.35xxx
As you can see, we come up with an effective compression ratio of 15.3 or so. A motor in this effective compression range is easily daily driven with proper fuel and timing adjustments/upgrades.
Why will a forced induction care always make more power at the same compression level? This answer is easy to see after doing the maths. Your engine will always see the effective compression level. If you are N/A, you have no additive. A B16A N/A will still make the 10.4:1 static compression, while the boosted B16A will be over 15:1 from the effective compression ratio.
When building a motor, we are all after a higher effective compression ratio. So which is better? In the next part of this article, we will weigh the pros and cons of the following combinations of static compression ratios and boost pressure:
* Low static compression / High boost
* High static compression / Low boost
* Medium static compression / Medium boost
Low static compression / High boost
Tuning plays a big key in all boosted setups. As the static compression ratio gets higher, it gets harder to tune. Lack of proper tuning leads to detonation, which leads to blown head gaskets, thrown rods, and cracked cylinder walls. Since this setup involves low static compression ratios, it is easy to tune. Just crank up the boost a little more to make up for the effective compression that is lost from the lower static compression. This is the easiest way to get a car boosted with the least amount of tuning. This set up, however, lacks in the low end torque department due to the fact that it relies on the turbo for most of its power.
High static compression / Low boost
This set-up is harder to tune than the above set-up, but at the same time, its output is overall higher, due to the higher static compression. This eliminates a lot of the low end torque/turbo lag problems that the above set-up has, due to the fact that the higher static compression creates more power from the engine, and relies less on the source of the forced induction to create the higher effective compression level. Proper turbo size also plays a factor but, for the sakes of argument, we will simply discuss the motor's properties.
Medium static compression / Medium boost
This set-up takes the best and the worst features from both sides. It will give a little more bottom end, but makes it a little more difficult to tune. A lot of people choose this route for VTEC engines. Dropping the compression down to say 9.5:1 and running around 9psi creates this medium zone that most people who boost tend to fit in.
So why does boost always make more power than N/A?
It's a simple explanation. In order for an N/A car to hang with a forced induction car, it would have to be running 15+:1 compression ratio; a ratio that's simply not usable on anything less than 125 octane gas.
What set-up do I recommend you build? It all depends on how much you know about cars, your ability to have it tuned, proper parts, and proper fuel management *cough* Hondata *cough*. If you don't have time or expertise for tuning, drop the compression, and run a standard boost level around 6 psi. Go impress your N/A friends with your new found knowledge