Charles, I looked on the net and it seems a lot of people who own modified 02's have gone down the road of ITBs. This makes it a lot more easier in terms of knowing others have done it and have set the car up properly, so more resources are available to you for reference.
ITB's seem good for better bhp figures at the higher rev range, so you will lose torque on the lower end. If im not mistaken, this was the difference with the BMW M5, you had to rev its nuts off to get the power. Mercedes had the higher torque available in the lower rev range with its longer intake pipes.
Carat, for any of the M104 engines it will have to be a custom job. Its worth browsing the W202 forums as some guys who own C36 AMGs have done extensive custom supercharger and turbocharger upgrades. I think the main problem they had was how much boost they can run on a 3.6 as its compression ratio is already high at 10.5.1. Adding more boost on that compression ratio apparently keeps blowing MB headgaskets unless you can fabricate a slightly thicker one made from copper. This will ensure a good seal all round the engine and prevent any oil leaks from the front or the rear of the engine, with the advantage of handling boost much better for the long term.
Having said that, a guy in the US (Street Power Magazine, April '97) twin turbo'd his C36 with rebuilt heads, pistons and other bits. He managed 561bhp using the stock block and compression ratio 10.5.1. running 8 psi boost. Not sure how long that engine lasted for though.
Anyways, everyone has different needs and requirements. Personally I share the same sentiments as Dash, 300bhp will do me just fine just as long as it keeps me infront of those damn 2.0 turbo diesels!