GoVols, I suspect the "lag" issue you describe is a drive-by-wire issue common to all (many) BMWs, and probably not specific to the diesel engine. I have it with my 4.8. Therefore, I wouldn't count it against the 35d.

If I were buying today, I'd probably get the diesel. I think it's a better setup for pushing around a 5400 lb. vehicle. Massive torque.

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2008 X5 4.8i, Jet Black, Tobacco Nevada leather & just about everything else (no vent. seats, no 3rd row)