I had a '07 4.8 and got about 12 mpg in the city if I tried hard to be fuel efficient. I loved the car overall so when the lease was up, got a 35d. The power is similar although the experience (mostly sound, some of the urgency when you floor the V8) is different. I'm now getting 19-20 mpg driving the same places.

Overall I'm happy with the diesel. It's also true that the '10 has some electronic toys that are an improvement over the early '07 (back-up camera, new idrive, electric rear hatch). Financially it made sense for me as the diesel was cheaper and I was at the end of my lease anyways. In your case, you'll have to factor in the depreciation or lease buy out into your decision.

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2012 F10 550xi Carbon black/oyster
2011 E92 M3 SSII/black
2012 W166 ML63 Steel grey/porcelain
2007 E93 monaco blue/beige (retired)
2010 E70 35d Space grey/saddle brown (retired)