All facelift E53 X5s made from 10/2003 are equipped with X-drive system. Your question 1 is not problem at all, your question 2 is not problem at all if your have proper tires and wheels.

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--2004 E53 X5 4.8is - ECE version; right hand drive; Located in Hong Kong; ext. black sapphire metallic; int. leather black; adaptive dynamic bi-xenon headlights; 16:9 onboard monitor w/o navigation; 20" genuine BMW Y-spoke 214 wheels with Bridgestone Dueler H/P Sport tires; Int. rear view mirror w/ compass.