I haven't owned a 240 with a M47, so I should warn you about that.

With respect to the differences:

M46 pros:

Somewhat stronger
Doesn't need to be overfilled when changing fluid
1st gear in some versions is slightly taller (3.71:1, instead of 4.03:1)
OD ratio is slightly taller (.79:1, compared to .82:1)
Uses U-joint at front of driveshaft

M46 cons:

Overdrive - another piece to fail, requires wiring to be added to operate the overdrive
Certain turbo and later model boxes have been abused - I had one higher mileage turbo box that had a flaky 4th gear synchro as well as a weak 3rd gear synchro; also had a 1984 B23F box that popped out of 1st gear if doing engine braking - that box also had a very worn 3rd gear synchro
Most 240 series M46 overdrive units will need to have speedo drive plugged with a freeze plug or something to prevent any leakage of fluid - either that, or find a way to run a mechanical speedometer and tie into the cruise control speed sensor on the back of the cluster for the LH 2.4/3.1 computer

M47 pros:

Lighter
Newer
True 5-speed manual

M47 cons:

Weaker than even a diesel/turbo/late model M46
Need to be overfilled with fluid
Uses 700 series/BMW-style guibo at front of driveshaft

If you do go the M46 route, look for a 1208141, 1208211, or 1208230 part number gearbox. Will have the 3.71 1st gear. I'd use the 1979-80 overdrive wiring, since it doesn't need a relay. You will need to figure out whether or not you want to keep the upshift light. The normal overdrive indicator light position was taken over by the SRS warning light on 1990 and newer 240s.

In my case, on the '92, I have a 1988 wheel, so no SRS. If I did convert to a M46 in it, I'd replace the SRS warning light with the green "5" from a 1989 cluster, then wire the yellow wire on the body part of the overdrive harness to that light's terminal in the round plug on the back of the cluster.

-J (member of the BB long ago - rejoined last weekend)
--
1982 242Ti - black, M46. 1985 245Ti - blue, M46. 1992 245 - white, Aw70.