i own an 06 mz3 and was wondering what is better, front or rear sway bar or a front strut bar? whats the difference? and which will improve handling more?

 

A FWD drive car typically pushes, or understeers. A rear swaybar will help to make the car a little more neutral at the limit. If you autocross, you'll notice the difference right away on your 1st run.
It's also gonna be a bit more loud, and you're gonna probably lift a rear tire while pulling into some driveways. Trade off.

The STB won't do much (looks nice though! ), and the front sway should be left untouched until the rear's sorted.

Strut tower bar (STB) is in the engine bay, running from strut tower to strut tower, over the engine
Swaybars are under the car and connect the struts together via the endlinks.