Im looking to integrate some motion sensors with ARM cortex M0. I need to some sensor fusion algorithms afterwards and send the data out with bluetooth LE. How powerful is the M0 processor? Is it possible that I would need to switch to M3 or M4 in order to make it happen? Any help is greatly appreciated.
Your question is quite hard to answer to : we have no information, neither on the M0 you use (especially about core frequency), nor on the sensors you have (data size, refresh rate...).
Cortex-M0 is quiet powerful, if compared with low-power processors. I found some examples[1] with Kalman filter implemented on an old dsPIC30F (probably about 4 times slower than your M0) for gyro/accelerometer purpose. A BLE stack is very light. I'm pretty confident about the feasibility of motion sensor handling with cortex-M0, but, as previously stated, we haven't enough information to provide a definitive answer.