You must have the AC on!
 

in situations when you get condensation on the inside of the windshield you MUST use the AC to dry the air. Otherwise the humidity in the air condenses upon contact of the cold windows.

I've never had a problem clearing the windshield by pressing the defroster/defogger (w/e) button.

The whole complaint that we have here is the fact that the button does not allow for incremental adjustments. You press the button, and it goes full blast, and as soon as you go to turn down the fan speed, it kills the dash fans completely. It only does this in the X5, my other BMW keeps the air on the windshield (and the button remains lit) but you can turn down the fan a bit.