So I finally convinced my wife to sell her 1998 Passat, just after it rolled over 100,000 miles. We bought a certified pre-owned 2004 BMW X3 2.5i with 25k miles on it (for $29k in case you're wondering).

Here's the major options:
Silver Gray metallic
Black Leather
Steptronic (it's the wife's, after all)
panoramic (two pane) sunroof
xenons
heated seats
park distance control
premium hi-fi

In order to find a CPO X3 with the equipment we wanted and low enough miles with a good price, we had to travel nearly 80 miles to a BMW dealership in NJ. Overall, I'm happy we did.

The X3 really drives an awful lot like the E46 3 Series that it's based on. At least that's the way it drives up to 8/10ths, then you notice the higher center of gravity, as it rolls into hard turns more than a 3 Series would.
The 2.5 liter gets the job done, feeling as smooth as ever, and it has enough beans to feel peppy, if not blazing fast. The gas mileage is 18 city, 24 highway, so it's worse than the 21/30 of my manual 330i, but the X3 is about 4000 lbs, so it's no wonder.

Back seat room is generous for a car with the E46's footprint (well, the X3 is actually a few inches wider). The cargo area isn't as big as our Passat wagon's was, but with no more baby cribs to cart around, I'll think it'll be big enough for our family's needs.

I drove my 330i back to back with the X3 yesterday, and yeah, my car has a lot more oomph. Plus, I was rushing to get through a light and cranked the 330 through a jughandle (think offramp with a tight 90 degree turn at the end) at 9/10ths yesterday. The 330's summer Michelins just slid a little bit as the car neatly drifted through the corner. The X3 would have felt a bit ponderous and top heavy in the same situation.

It doesn't matter much that the X3 doesn't handle just as well as my 330i, as the X3 is my wife's car, and it handles quite a bit better than the 100k mile Passat we sold.

Looks are subjective, and along with the "harsh ride" (the ride quality seems fine to me) seems to be the biggest knock against the X3. In short, in my favorite color (silver gray) I can dig it. It's not flashy like a Infiniti FX, but my wife didn't want a flashy car, and the FX seems to be overly wide. I'm already worried about my wife misjudging the width of the 73" X3 compared to her old 68.5" wide Passat. Besides, I like BMWs, and Infinitis really don't cost much less anyway.

OK, I think that's a long enough post. Here's some pics....