I have no experience with X5's, but one of the guys in our local club bought an 02 4.6is brand new. Here is what he said about it when I asked about the reliability of them:
As you know, we have an X5. It has been generally excellent, with the following provisios:
-Trunk rattle - known X5 problem - from new. Have spoken to several owners, none of whom have been able to affect a cure. Not a biggie.
-Wiper judder - the passenger side wiper blade has juddered across the screen from new - Dilawri replaced it under warranty once, with no benefit. They refused to do anything further under warranty later, stating "the windshield is pitted", as a cause.
-Electrics - when it's cold, we are getting a "rear licence plate", "side marker", and "reverse light" fault. Intermittent, since about 50,000km (now at 60,000). It's a pain in the ass.
-Seat memory settings - have not functioned properly since new - when you set them, they do not hold the settings properly - especially the mirror settings. TSB had been issued, didn't fix the problem.
-Door rubber - the rubber along the bottom of the front doors SUCKS. We have had to have both sides replaced several times (thankfully, under warranty) - known problem. The little snap fasteners aren't strong enough, and when ice forms on the rubber, and sticks to the bodywork, the rubber pulls right off.
-Sticky gas pedal - when depressed gradually, the gas pedal seemed "creaky" - known problem, with a TSB issued (eventually.... don't get me started... BMW Canada definitely on my black list, here...)
-Glove compartment - stuck closed - had to have Dilawri force it open, and replace the latch mechanism (warranty, when the car was CPO'd - at about 45,000km).
That's about it, that I can think of, off the top of my head. I'll edit my post if I think of anything further.
Would we buy another, in light of the problems?
X3's aren't bullet proof, either - I know at least half a dozen people that own them, that have had tons of problems, that make ours pale in comparison. I believe later X3s are better, but the first ones weren't great....
So he had some minor problems, but nothing with drivetrain. I hear that the digital lights on the dash burn out too, annoying, but not too major.
My Wife and I just bought an 05 X3 3.0L. They are a good alternative to the X5, but are not quite as wide, hence not quite as roomy inside. They are priced a bit better than the X5's, but will probably not hold there value as well.
Hope this helps.