It's the engine change from the older M54 engine to the N52 engine that's in your 325xiT. So yes, the E91 is quicker and it rides on an all-new platform, both technically and physically. The X3 is still based off the E46 3-series, so please, don't complain about the lack of luxury features because the software and such is back from 1999.

2007 X3s saw the N52 engine and it creates 260hp. It was also the year of the facelift. The '08s continue unchanged. It is marginally more fuel-efficient, quieter, and smoother. BUT the '07s also got the 6-speed automatic transmission from the E90.......which sounds great in theory. In reality, there have been fairly numerous complaints about hesistation, poor respose, and rough shifting. It's geared poorly and there has not been a software fix that is tried and problem. In short, if affected, the gearbox will ruin the entire driving experience. There is a big software fix that has just come out, but not many dealers receive it until later this month. I don't know if the '08s are fixed or still exhibit this issue.

Now for my 2 cents: I'm partial to the E46 and the M54 motor. I like how it's louder, sounds better, and how it doesn't have Valvetronic to dull the throttle response. We have an '04 X3 2.5i and a '06 325i sport in the garage, and despite the technical greatness of the 325i, I actually enjoy driving the X3 far more than the 325i. But if you like the smoothness of the E91, then go for the '08.