The E53 is indeed permannt four-wheel drive with a 40:60 front:rear default ratio. The X-Drive unit uses a wet multi-plate clutch controlled by an electric servo and is on the front drive output in the earlier versions. It only activates when the system detects a loss of drive on one pair of wheels so it then shifts the power to the other pair, and in extreme cases brings the ABS into play to control single wheel spin. The DSC system also uses it if you drive it like you stole it around corners to control under/over steer.
I've never heard of one wearing out, and given that it is not operating all of the time I would be surprised if it did unless the particular vehicle was used on loose surfaces all of the time - so needing a lot of traction shifting.
Under normal circumstances the slippage is going to be minimal which the wet multi-plate clutch will have been designed to cope with.
There's a detailed article here:
http://share.qclt.com/bmw资...3%20xDrive.pdf