Thank you both for the very helpful replies. It's good to know a bit more on some of the issues with the xDrive35d. I think what scares me a bit are some folks having to shell out $5k+ to fix valve seal leaks and some other issues with the V8. The problems with the 35d don't appear to be *as* expensive to fix.

I have considered the xDrive35i and they are priced within $1k of the xDrive35d. They're a good option, but don't offer as much savings in fuel economy as the xDrive35d which puts us at the top end of our budget. With a baby on the way, id have a hell of a time convincing my wife to spend a bit more.

It's a funny thing buying a car with a spouse. I bought and paid for my 530i on my own, and she doesn't really understand that sometimes its worth it to pay a bit more and reduce some of the risks associated with an older or higher mileage car. At least with the diesel, I can justify some of the cost (when compared to the price of a xDrive48i) because of the fuel efficiency. Anyways, I digress...!