Works for me!
 

For me, the X3 fit the bill. I was going to get an X5 3.0 but I liked the slightly smaller size outside, basically the same room inside, X-Drive system, sporty handling and 600 lbs. less weight with the same engine. It's taken some getting used to for the seating position having driven a 300ZX for the last 14 years! My only real complaints are that the brake pedal is too close to the gas (I keep catching my foot on it, wish it had the same size pedal as the manual) and the gas pedal angle seems too verticle on long trips when I'm not using the cruise control.

We may have some snow/sleet/ice tommorrow. We don't get too much of that here. I cant wait to try out the X3's capabilities! I also plan to take a skiing trip in it early next year. Woo-Hoo!

I think you have some facts wrong. Here are some numbers from BMW's website:

Measurement / X5 / X3
Front Headroom / 39.9 / 38.1
Rear Headroom / 38.5 / 37.8
Front Shoulder Room / 58.0 / 55.8
Rear Shoulder Room / 57.2 / 55.4
Passanger Volume / 97.6 / 90.1

Absolutely. The X3 is a fine vehicle but it is smaller than the X5 particularly for passengers in the rear. Cargo space is comparable if not slightly bigger in the X3.

Ditto for me too. The wife drove the loaner while her X5 was in for service and she is wanting to look closely at it for her next car when trade-in time comes around.