Originally Posted by JCL

The newer models are only more reliable because they are newer, and generally have fewer miles. A well cared for 2003 will be more reliable than an abused 2004.

6 speeds are better in that they provide better fuel efficiency. No difference in power handling capability. Additional clutch packs aren't a concern. Newer transmissions such as the 6 speeds may have more software issues, or not. There are more electronics involved.

The 4.6 isn't known to have a greater incidence of transmission problems AFAIK, but it is known to have torque converter problems. Those TC failures can take out the transmission due to debris.

None of the various transmissions have shown failure modes related to too much power going through them. They have lots of failure modes, but overheating isn't one of them. The exception to that is the early diesels in the UK and elsewhere (not NA), which were upgraded to the ZF transmission from the V8 to better handle the greater torque.

There can be failures associated with valvetronic on the 4.4, but I would say the benefits outweigh the risks. I wouldn't hesitate to choose a valvetronic engine over a non-valvetronic engine, myself.

Clutches in the ATC transfer cases haven't proven to be an issue, as long as you have the correct OE fluid in there and the actuator motor is functioning correctly. Actuator failures have caused clutch problems due to slipping, but the clutches don't tend to wear out by themselves. It is a proprietary transfer case, so there are limited parts and aftermarket options available for service. Plan on dealing with the dealer if you have a problem, but don't expect it to break. I think the benefits of the x-drive variable torque transfer outweigh any downsides to having to buy more expensive OE fluid, or worry more about failures.

There is an issue with the output shaft splines from the transfer case. There is an AC condensate drain right above them. The splines can rust, and they don't engage very far. The splines can fail. There is a fix involving a 3rd party modified output shaft with rebuilt splines, slightly longer. It has been reported to be very successful for those who have failed those splines. Good info if you do a search, the supplier is RaceMalibu on this board.

Other than that issue, I don't think anybody worries about the transfer case in their X5s. I certainly didn't, and I don't worry about the x-drive TC in my X3 either.

Overall, reliability is related somewhat to design, somewhat to initial assembly, somewhat to care and maintenance, somewhat to complexity, and somewhat to luck. You can only control a few of those. You can do your due dilligence on a prospective purchase, you can check maintenance records, etc. One of the things you can control is complexity. Newer models are more complex, and vehicles with lots of options are more complex. Trouble is, people tend to like their options. If you search through this board, you will see a lot of posts about devices that are really electrical gimmickry IMO. Those are the things that tend to fail more often than basic mechanical components. You will read a lot more about transmission software than transmission clutch packs. My choice is to buy the simpler version of the vehicle I want, where I can (no Nav, few technology options) but for others, the ability to synch their phone with the iDrive is why they buy the car. It is up to each individual.