As a previous E53 4.8is owner, who's never driven any other X series (and am thus remarkably unqualified to offer an opinion) I have the following advice: Get the X5.
The equipment level in an X5 is second to none. The comfort is second to none. The performance I experienced my 10-year-old X5 was unbelievable.
The strongest memory I have of my X5 was how it shrank around you when you were on the road. Getting into it felt like sinking into La-z-boy recliner inside an armored truck; but once you were behind the wheel it accelerated, stopped and steered like a Subaru WRX.
A X5 isn't a big car: Not by today's standards. I can't think of any situation where I'd prefer to be driving in a X3 or X1 rather than an X5.
You get a small X-series because you couldn't afford a X5, or your other half made you compromise.
There's a good argument to be made asserting the supremacy of a M3 or a 1M over a M5 because of its small size and handling - but I don't believe that argument holds in the world of SUV's.
If you buy the X3 I recon' there'll be regular occasions when you'll think to yourself "damnit, I wish I got the X5." ... I really doubt the reverse will be true.
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