I have the X5 with third row and a Jeep Commander. The second row of seats is a much roomier and comfortable ride than what is available in the Jeep. And the Jeep is a much larger vehicle. I've always been extremely happy with how large the X5 is on the inside, compared to how small It looks from the outside.

As to the seats being firm, they seem about the same as my friends x5 without the third row. The recline is definitely nice though for taller people as you don't scrape your head against the roof lining since you're more reclined.