Add me to the list. 03/04 X5 4.4 - I had asked about this in another post, another board and got strange looks too. Living in Dallas and I must say some days are much worst than others. Sometimes 5-7 seconds lag, other times very little 2-3 seconds and somedays normal.

My other car, (company car) a Pontiac works flawlessly everyday as far as tuning RDS stations and displaying info, absolutley no lag what so ever. My "radio unit" died after muting for a BT phone call about a month ago. (everything else still worked, BT, Nav, trip) It was "replaced", although all my nav history and trip history remained, even my DSP settings, BUT all my preset stations and time had to be reset. It also looked like my screen did not change, as it came back with the same tiny blemish that it had since new. So what they "replaced" I dont know.
I know what you mean about the "surfing" thing as my wife does it constantly and remarks about the delay all the time. I try to listen to CD when she rides.
I never tried turning the RDS off, but may give that a try next time.
We can't be the only ones with this issue. It's almost too silly to mention at the dealer, but I will next time.