I have an '04 X3 with an automatic. At this point, AT failures on this model are hard to predict because the cars themselves have not gotten enough mileage (and aren't old enough) to detect reliability. However, I believe it shares the same GM 5-speed AT as the E46 3-series. Based on what we know of BMW's automatic transmissions, they tend to go bad anywhere from 100-120k miles. Some go before, some never break, and there's no surefire way to determine when/how it'll break. Heck, even an ATF fluid change at 50k may not stop it from failing at 100k. This is not unique to the X3; all BMWs are like this. Usually when you lose Reverse, that means you're gearbox is on its way out.

If you can, look for a manual transmission X3. They are a good drive, and you won't have anything to worry about. Otherwise, look for an '05 (smoother ride, returned suspension) or one with lower miles.

The X3 itself is a very reliable vehicle. Ours has been through sweltering humidity in the summer, to -5F cold/snow in Montreal, and everywhere in between, including off road. Our vehicle does not have the window creaking except during the summer when it's very humid. It starts the first time every time, despite the fact I'm a college student and I park it outside. It's terrific fun to drive, and sized just right. I plan on driving this one to the ground; they don't make BMWs like this one anymore and I have a hunch it'll take me past 100k miles.

Oh, and the transmission on mine is one of the best aspects. Shifts are imperceptible under light throttle, and it's always in the right gear when I need to do one-lane passing. The same can't be said about my mom's '06 325i.