After attending BMW's "driving school" at the Texas Motor Speedway in May, I came away from the event very impressed with the X5. I am living proof as to why BMW would spend so much money on an event like this - I think it was only 2 weeks afterwards that I placed the order for my X5.
I had looked at other BMWs, including the very comparable 5 series sedans (528 & 540) and became more and more convinced that the X5 was as much, if not more, a luxury sports vehicle and definitely NOT an SUV. Looking at the 5 series sedans, there were several things that I would have changed (for example the cup holders or CD player [only available as a changer and not an in-dash single CD player]). There is nothing that I would change about the X5's features and functions.
I ordered the 4.4 V8 with Sports Package and Activity Package. I opted against the V6 only because I wanted more features than they offered as standard. When I priced the V6 with everything I wanted, it was as much as a standard V8.
My experince at the driving school told me enough about the performance of this vehicle. I've owned other SUVs before - again let me just echo BMW's advertising, this is NOT a SUV. Acceleration is brisk - just what you'd expect from any BMW. Braking is better than any other BMW (the rotors are the size of most small cars' whole wheel!). Handling is amazing... No chance of truck roll-over here.
I did not get the indash GPS navigation system (practically the only feature I didn't get) because 1) I wanted an indash CD player rather than a changer in the glovebox or trunk and 2) $1990 is a bit expensive for a GPS. I know where I am going most of the time and for times that I am not, I have other ways to solve this problem (like an external GPS system). I also was turned off by BMW's subscription costs for updates.
I would highly recommend the 16-way seats. Absolutely amazing how comfortable they can be for long trips.
UPDATE 10/2002
I've had the car now for a little over 2 years and have 21K miles on it. It still rides like a dream. Problems that I've had - intermittent engine stalls or not starting. They have not been able to figure this one out. It has only happened once where I could take it to the dealership. They reset the computer and it ran fine. They also suggested that maybe I was not buying the premimum gas (which I am, of course). I also have had a problem with the door handles on the inside. The rubber surface has started to flake away. My friend has the same problem on his 3.0 X5. He follows some of the BMW boards and he says that they will fix it for free if you complain. He did and got his replaced. I have not had any service except for my initial problem and my 15K mile service. Next time I go in, they will replace.
Over 20K miles it has started to develope a few more rattles and jiggles over bumps, but the engine is going strong and the car still is fun to drive. I am hard pressed to say whether I will turn into back into BMW at the end of my 36 month lease or keep it. I have not seen enough value in the new models to really make it worthwhile to start over again - although I think I could still make money on mine because of the low miles, excellent condition and they've held their value in the market.