I owned an '07 X3 w/o sport package and now own an '06 X5 with sport package. These are both great vehicles but with extremely different characters. First, I second everything that has been written in this thread. The X5 is much bigger while the X3 drives more like a sports sedan, etc. So, I'll touch on some subjective impressions. Bear in mind that I've only had my 5 for 3 weeks. The X3 is a well done vehicle. It offers versatility, good handling, quality and a degree of comfort. It is fairly solid and a decent highway cruiser.

The X5 is a different beast altogether. It feels as though it was put together with far fewer compromises. It is like the proverbial 'bank vault on wheels'. Its solidity is beyond reproach. It is heavy but in a good way. That weight seems to assist it in achieving a 'riding on a cloud' feeling, even with the sport package. It is smooth, quiet secure and profoundly comfortable. The extra space inside goes a long way towards making this the best highway cruiser I personally have ever driven. I've owned scores of vehicles. The interior fit and finish is luxury par excellence. My vehicle has the comfort seats and they are fantastic. All electronic systems (nav, audio, computer) are integrated with each other and work quite well. The panaramic sunroof is beautiful (as it is in the X3). The leather and wood are extremely well done. Handling is remarkable for such a heavy vehicle but, the weight takes its toll. It is not quite spry and sports-sedan like but excellent nonetheless. Power, even with the 3.0, is good and the exhaust note is nice.

All in all, the X5 is a tremendously gratifying and luxurious driving and ownership experience. It feels, again, uncompromised; as though the engineers threw everything they had into it -without concern for weight. The X3 feels quite compromised -it is quite good at everything but does not excel.

Finally, I love fold down tailgates. I do a lot of mountain biking, skiing, etc. and love a place to sit and gear up.

Check out both vehicles but, pay attention to subtle subjective differences.