I bought a 118i for my mother earlier this year, it goes absolutely fine for around town, but I don't think I'd take it on a trip with more than 2 adults, passing would be a chore I suspect. As Paul said, space is down on others (we have a Mazda 3 that would kill it on space and performance), but it drives really nicely, feels like a big car in ride and handling.
Haven't heard about chains slipping (maybe Glenn has?), only oil leaks, supposedly preventable by cleaning a valve somewhere and an oil feed pipe, it's mentioned on the forum here somewhere.
With the Professional stereo, auto xenons and auto, it's a nice place to be around town.