The Definitive M42 twin mass fly wheel to m20 conversion information
Articles 1997: New Products and BMW Performance Research and Development.
The necessary parts:
The necessary modifications:
The fly wheel must be machined: the lip indicated by the red arrow should be turned down about 2 ~ 5mm (the flywheel pictured has also had additional machining for weight reduction)

Also: (not pictured)
The flywheel can be drilled to accept the TDC locking tool for the M42 by installing it on the engine (set precisely to TDC) Using a very straight and sharp punch carefully mark the fly wheel through the alignment hole in the block (located just below the starter).
Drill a hole of the same dimension as the locator hole in the original M42 fly wheel then have the fly wheel balanced (or drill another identical hole at exactly 180).
The Drawbacks:
A lighter fly wheel on the M42 will have an adverse effect on the smoothness at idle and on hard accelerations.
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