I can confirm this after a nice long drive today... the air in the back is not hot at all. Seems it's just whatever airflow being blown back there disregarding the climate control up front (which was maxed 84F). Not sure why it has a red/blue switch in the back if it doesn't work. Don't have rear climate but you would guess that the difference is it lets you select your own preference... something is amiss.

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'08 X5 3.0si - Alpine White / Saddle Brown interior
Specs: Sport Pkg, Premium Pkg, Tech Pkg, Comfort Access, Aero Kit, Style 433 staggered 20s on Conti DWS
Mods: Carbon 35 tint, LED angel eyes, GP Thunder 7500k fogs, H&R 20mm/25mm spacers, clear reflectors, gunsmoke-tinted taillights
Coded: Digital speedo, windows/sunroof/tailgate close via keyfob

X5 pics at Flickr