Hey DS,
Another X5 in Aus here. I have taken my 2004 X5 4.4 off road a few times this year with a tag-along 4WD tour company: Great divine tour and they are very impressed with the X5 off-road capabilities considering its low clearance. The new X-drive system is very capable. We did a tour at Stockton beach in NSW on sand dunes/beach and the X5 has no problem whatsoever as long as the DSC button is pressed. On a steep sand hill challenge, even the tour guide with his turbo diesel Toyota landcruiser could not get up and my X5 had no trouble going up (and it was my first time going off-road too).
I am going on a 2 days 4WD driver training in a few weeks time and looking forward to the most out of this awesome luxury SAV!
Here are a couple of photos on past trips (not sure if it upload correctly, haven't been on the forum for a while). Enjoy.
QT
http://www.xoutpost.com/attachment.php?attachmentid=2699
http://www.xoutpost.com/attachment.php?attachmentid=2700