Yesterday I had a 2007 X3 loaner with 12k miles on it, since my 2006 X3 was in for the every 6 month paint treatment (some fancy wax) and it's free annual state inspection (we really like our dealer). Can't believe the car is 2 yrs old already.

The newer engine with 260 horses is definitely quicker, especially once you're moving. Loved the greater acceleration when entering interstate highways. Loads of fun. On the other hand, the hesitation when accelerating from stop with the 6 speed auto is a big disappointment compared to my 2006 5 speed auto. Ride quality with standard suspension is nearly identical between the two years. I also agree that there is a less aggressive sound with the newer, 260 hp engine. The loaner didn't have xenons. Once you live with them you can never go back to the "dark side." If the auto tran glitch is fixed in 2008, the newer car is worth the extra horsepower.