Here's my $.02 as an owner of a loaded 2006 LR3 HSE.

Overall I've been pretty happy with the LR3. Yeah, it drives like a truck, and feels fairly wobbly around corners, but if you provide smooth steering inputs, it actually corners reasonably well (but does lean a lot). It also provides a very comfortable ride, the suspension soaks up just about any kind of bump/wave without skipping at all. The transmission is ok in manual or sport modes, but does shift slower than I'd prefer. When we chose the LR3 in late 2005, it was mostly due to the interior layout and functionality. With a growing family, and the desire for 7 seats, you couldn't beat the usability of the interior without settling for a minivan or looking at the huge Suburban XL. The legroom and headroom in all 3 rows is pretty phenomenal when you consider that the overall length of the vehicle is the same as the new X5. Other nice standout features are the super tight turning radius, and obviously the off-roading capability (it's amazing!). Everyday use and commuting yields us 13.5 to 15mpg, and highway road trips have yielded 17.5 to 20mpg. Not great, but not super horrible, either. Reliability has been pretty OK with ours, a door speaker rattle, brake light bulb, and now I think the armrest refrigerator is broken. That's it in 30k miles, tho.

Having raced cars for several years, and now owning a 2007 335i sedan, I would prefer having an SUV (or SAV, whatever they want to call it) that was more enjoyable to drive, but hopefully without sacrificing too much functionality and space (I don't go off-road much, either). The E53 X5 was not even a consideration, but the extra size and new 3rd row in the E70 could make it a real winner for me. And to me the holy grail is the new twin-turbo diesel version.