My other car is a MINI!!!!
generally speaking, you will get a smoother ride from a decent matched set of shocks and springs, compared to coilovers.
I've got a weitec shock and spring kit on my A3, and it's fairly firm, but not too bad. a mate of mine ran his A3 on some decent coilovers at the same height, and it was much harsher on bumpy roads.
The S3 doesn't take well to be really lowered a lot anyway, so personally, I'd spend the money on some decent bilstien B8 shocks and H&R springs.