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I just bought a 2011 X5 in December. My wife loved it so much that we considered a second X5 but decided to get her the new X3 instead. The back seat of the X3 is nearly as roomy as the X5. The cargo area is smaller. We can fit our dog crate in the X5 but not the X3. The front seats are comfortable, but I definitely notice that the X3 is smaller than the X5 when sitting in the driver seat. The X3 is very fast and nimble, whereas the X5 has a more substantial feel. Some of the electronics in the X3 have nice improvements over the X5. I can see why some would decide to downsize. To me, the X5 feels a bit more luxurious and masculine, but I won't complain when my wife and I have to trade for the day.
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