Personally I have not ever bothered with a warranty and always have bought used bimmers.

More important than a warranty (to me) is a good independant mechanic. If you plan to take a gamble at the dealership for your repairs, I would stay far away. They will tell you to replace absolutely everything that isn't perfect on your car, and charge you thousands of dollars on a regular basis. This is what gives the X5 a bad name.

I would definately recommend the sport package, the difference on paper isn't much, but the difference in handling is huge.