Please read Mkaresh's post(Yes Bubba, It is a truck) before reading this post, as this post is in reply to his excellent review of the X5. I decided to post this as a review since it became kind of long for a comment response to his review.
Mkaresh, I largely agree with your post. I own a 528i wagon(see my review) and it IS a better handling and bigger (cargo space)vehicle than the X5.
BUT, cars appeal to peoples emotions as often as their sensibilities. I drove a X5 with the 4.4L engine and it definitely has emotional appeal in spades. Let's face it, most people worry about how they will look in a car above all else. Especially in this market segment. And the X5 looks GOOD! Also, the interior is like no other that I've seen-stunning!
I agree that it is a compromise vehicle. And I like the wagon more for its extra space and better ride and handling. But if I didn't need the extra space, weren't such a driving enthusiast, and wanted something that said something about my position in life loudly and with flair, I could do much worse than the X5.
Lastly, regardless of any compromises, this thing is a BMW. Forget the image, forget the prestige, put your ego aside. To me there is ONE reason to spend this kind of money on a vehicle. Because it is an incredible engineering achievement. You feel it in every shift, through every corner, and approaching every stop light. You feel it when you open the door and get in, and you feel it when you employ any of its features. It is automotive genius, and thus any BMW is a bargain to those with the means.