Recoding isnt "needed" as such, but when mine was converted it still had the Auto DME, and mine, like others, had a bad rev hang when changing gears. You get used to it, but i would recommend recoding.
I wouldnt guarantee it. Mine had the jatco jerk and within a couple of thousand KM, including a trip fully loaded from CHCH to WGTN, the trans decided to give up and slip really badly and the jerk got to a point where i couldnt trust it to change gear crossing an intersection.
Anyway, welcome to the club/forum, Charl. The E36 are great cars, and you will love it if/when you convert to manual, it completely transforms the car. Well worth the money.