X-drive came out in late 2003 for 2004 model year. Our x-drive X3 is better in the snow than our non x-drive 2003 X5 was, but not by a huge margin

It is all about the tires.

I have Toyo A/Ts on my '02 4.4i and it does awesome in the snow. It's also a hell of a lot of fun with the DSC off.

Yoko Geolander tires handled 12"+ of fresh snow in a parking area. I wanted to see how it would handle CT winters when we first got it and also to get used to the DSC system. Neither my wife or I had any problems through 4 CT winters or on the 1.5 mile dirt road we now live up in MO even with 6" - 8" of hard packed ice and snow before they plowed last winter. As we are on a farm road they don't plow us out until last.
Remember the most dangerous part of any car is the nut holding the steering wheel.

Tell your friend to try some winter tires :) even really tough all seasons will make a huge difference

Greetings from Utah! "Greatest snow on earth" :D

its all in the tires
 

My 03 (pre x drive) is insanely fun in the snow. I love the way it has a slight rear wheel bias. That being said, most people neglect the tires. I inherited my all season tires from the previous owner and they totally suck in water and snow. The suckage is noticed when going downhill where the advantages of awd are non existent. It seems to me that the x was made for "performance" dry road conditions so the tires and the rim size are tailored towards that. The AWD system combined with the "electronic limited slip diff" works surprisingly well.

yes - it's mostly the tires. the awd system works well enough, although not as well as Audi's quattro I must say.

I had a 03 4.6is with Pirelli Scorpion Ice and Snows in 265-50-19 size.
Also had a S4 with 235-45-18 Pirelli performance snows.

Both were V8's with 340hp. And even tho the X5 is heavier, the Audi did much better in the snow.

But I had no issue with the X5 at all on those tires, it worked about as good as any SUV I have had with a locked 4x4 configuration. But that Quattro is something else in the snow - step above anything else, IMHO. Well - probably on par with Subaru which is a very similar Torsen 50:50 diff. Mechanical is better than electronic IMO.

I live in a city where there is a lot of Ice build up on roads and then some snowflakes build up on the ice. I will never drive any sort of vehicle in a Canadian winter without some sort of winter tire (whether it be an ice tyre or snow tyre) and I have to say, with the brand new cooper discoverer 255/55R18's I have on my X5, I'm simply NOT impressed with its performance. Now I'm not blaming the X5, cause it simply could be just a bad tire, but I have to say, my 2000 Grand Cherokee was the most unstoppable vehicle in snow I've ever used OR seen used. So to go from a Grand Cherokee with amazing ice tires to an '05 X5 with new snow tires is a bit of a let down. Again I am not sure if its the tire or the traction/X-Drive I'm not impressed with.

I heard some people claiming that the X5 is no good in snow ? But when you asked questions, you quickly find they drive on 19" wheel with 4 season tire or performance tire, this is the equivalent of doing roller blade on ice. Just like Clockwork, I live in winter-land and winter last about 5 months, in a typical winter we can get 15 feet of snow, we also get ice storm, ice rain etc. Let's put it that way, if you live in a country where there is a winter, meaning snow and such, you need 4 good winter tire no matter what car or suv you drive. I have had the X5 for about 3 years now, and it's been very good, better than the Pathfinder or the Murano I have had in the past, I mean they were ok but the X5 is a top notch better. I drive 1 h 1/2hr to the country house up in the north hill every week-end and I have nothing but good to say about the X5 (4.4i 2004) Another factor that count is people are driving like plain idiot on a icy situation, many time the SUV are the first to loose control and ending up off road, they think because they have suv they can drive fast on ice. I'm 50 and I never had an accident in winter, but I drive accordingly to the road condition and lower my speed wether it's raining or snowing. Follow the rules of good sense and your X5 will serve you well in any condition. Gentleman have a wonderful day and please drive safely in all conditions.