Looks like its the real thing to me. My co-worker discovered this when the entire exhaust system was removed. Pretty cool.

another view

I think its a Carbon/Kevlar or some sort of blend. It's not 100% CF.

We found it when my dad's car got tapped by an idiot at a stop sign. When we went to order a new part, it came in aluminum. Since insurance was paying, we sent it back and requested the composite piece from BMW. I haven't yet figured out if its some sort of special piece or not. Interesting for sure!

Hey Bryan,

I posted this up on the E46 M3 bimmer.org and they said the same thing as well not being 100% CF but some sort of composite.

I'd be interested to find out just how many M3's this part ended up on from the factory, and why the standard replacement is now AL instead of composite. The guys at the local BMW dealership thought I was crazy when I climbed up underneath the rear of the customer M3 they had on the showroom floor. :)