My issue is now getting worse. It will actually slightly jerk you when shifting into 2nd and down into first. Happens 100% of the time???

I have noticed the same problem with my 02 X5 4.6is with 74K.
I really feel it when driving @ Hwy speeds and I want to pass someone. I push the pedal to the metal and the tranny does it's thing and downshifts usualy to third. So soon as I feel the power power come on I feel that thump And If I let off the gas as soon as the power kicks on, then I really feel a hard thump. I have also felt it when I was backing out of my garage with my hand-brake on, while the X5 was still moving backward I lowered the hand brake lever down and heard that thump again.
Would you guys try that in an empty parking lot or in your driveway. While in reverse pull the hand brake and let it go to see if you feel/hear the thump. That would lead me to think it might be a suspension, control arm or bushing problem.
Thanks

you sure it's not one of the flex disc on the shaft?
look below the car to see the condition of the flex disc, any cracking, could cause the same sound you're hearing when slowing down...

I have thought off that too and I tried the reverse hand brake thing while in reverse and while in neutral and I have the same result. Hmmmmm I hope it is not one of those things that have to get worse in order to figure out what it is $$$$$$$.
Thanks for the advise.