Living in Arkansas, I have often wished I had AWD. If this will be your only vehicle, then I would suggest you go xi. The new x-drive can deliver 100% of the power to the rear wheels (I believe), so you're not giving up much.
Personally, I would go for the 530xi, since it is more spacious and has nicer amenities. I personally like the look of it better than the 3 Series. Of course, we are talking about a price difference upwards of $15,000 for not that much molre car. The 5 weighs a little more, but it also has 25 bhp on the 3, which trasnlates to slightly faster (about 0.2 sec difference) 0 to 60 mph on the 530xi.
In your position, I would test drive both cars and decide which one I like better, all things considered.
Lastly, the 5er comes with BMW's iDrive, which controls many o fthe entertainment and other functions of teh car using a single knob on the center console. Many people do not like it, so you may want to play with that a little also. Of course, if you get Navigation on the 3, you will have to use iDrive as well, so that may not even be a pint for debate.
Welcome to Werkz and I hope you come back soon.
I wish you luck with your purchase.