Ladies and gentlemen I have finally figured out the difference between the combinations of these packages.
Sports Activity Package without Dynamic Handling Package
Let's say you get the SAP without the DHP, you get something called "Dynamic Drive Control." Dynamic Drive Control, manages only drivetrain and engine preferences. On Normal, your engine will behave modestly, reaching up towards the fuel saving gears 7 and 8 as often as possible. If you click the up button to Sport, the engine will behave as though you have pushed the gear lever into DS, staying in lower gears with a touchier throttle response. If you push up one more time into Sport+, your engine will hold lower gears even longer, your throttle response will be near immediate with almost ZERO shift lag, and if you push the transmission to M (using the SAP designated shift paddles is best), shift timing increases with near DSG immediacy. If you're hard on the throttle when you upshift, you'll feel the car jolt a little bit. Don't be alarmed or concerned; your SAV is having an identity crisis between utility road car and sports/track car, and you like it. Selecting Sport+ will also turn on Dynamic Traction Control, which is standard for most 2010 and newer BMW models (there's a button on the shift console plate with skidding tires). Dynamic Traction Control, or DTC, "releases" your car and enables the transfer case to apply up to 100% of the power to your rear wheels, and 60% of the power to each individual wheel where superior loose-surface traction is required. Powerslides, anyone?
Sports Activity Package with Dynamic Handling Package
If you get the SAP and the DHP together, you not only get aforementioned Dynamic Drive Control, but you also get Variable Sport Steering, which variably adjusts the steering ratio depending upon your speed (something I don't love but hey, it works damn near perfect). But wait, there's more! You also get the option to control the accuracy and responsiveness of your steering, brakes, and suspension in addition to the Performance Control engine settings. And you can decide whether you want Sport to change drivetrain settings, chassis settings, or both via iDrive. The names for this vary globally: Dynamic Damper Control, Variable Damper Control, Dynamic Chassis Control, Variable Chassis Control, Adaptive Damper Control, etc. Stay in Normal and your suspension will be characteristic of a very stiff, nimble Lexus. Ordering the DHP allows you to delete the sport suspension via the Normal mode. That's not a bad thing if the ground is insufferably rough. If you selected that Sport should change both chassis and drivetrain: the drivetrain settings will be the same as described above with the SAP but no DHP. But your chassis settings: your suspension stiffens and the car becomes more nimble almost like a 3-series wagon, the steering tightens for increased responsiveness, and your brakes stiffen but become more responsive as well. Going into Sport+ also offers the same drivetrain settings as described above, but you do not have the option to alter the Sport+ dynamic settings.
The M-Sport Package with/without Dynamic Handling
The relationship between M-Sport and DHP is the same as the relationship between SAP and DHP. The online configurator and options booklet will drive you back here telling me I'm wrong, but certain information has been left out for the sake of making money and confusing buyers into things they don't understand. I can assure you, I'm correct about this.
The website will depict the M-Sport Package and DHP as having something called Performance Control--which manages a rear-bias torque split for sportier power application--where the SAP does not. This is not Dynamic Drive Control. Dynamic Drive Control is a term used for the 5 and 7 when the F10 and F01 models debuted with the console mounted Comfort-Normal-Sport-Sport+ switches as a new option. It is difficult to apply this term to the X3 because there are other options and features that share the DDC acronym.
Dynamic Handling without M-Sport or SAP
The online configurator will tell you that the DHP comes with Performance Control and that the SAP does not. I believe this is actually correct, in that if you order the DHP and the SAP you can have all that the M-Sport and DHP combo offers EXCEPT the aesthetic alterations. Performance Control is a feature that maintains a rear-oriented torque bias (40f/60r) so that power application offers a sportier, high speed cornering friendly vehicle. This power is variable as described earlier via Dynamic Traction Control (standard).
Below is the link to my order list as copied and pasted from BMWNA Track My 2011 X3 xDrive35i. As you will see, the Dynamic Handling Package listed three features when I ordered my car back in December (early February delivery), and now it lists only two. I believe this changed when the M-Sport package was added. It's either a deceptive ploy by BMW or a mistake that just so happens to look like a deceptive ploy.
X3 xDrive35i En Route!
http://x3.xbimmers.com/forums/showthread.php?t=485060
My order (Dec '10-Feb '11):
Dynamic Handling Package
-Variable Sport Steering
-Dynamic Damper Control
-Performance Control
Another order (Mar '11-present)
Dynamic Handling Package
-Variable Sport Steering
-Performance Control
Clearly the Dynamic Damper Control name has been compromised; the option still exists exclusively with the Dynamic Handling Package, but it is no longer specified as exclusive to the Dynamic Handling Package (even though it is).
I hope this dispels any confusion. I apologize if I've further confused you, but my words are as clear as BMW is willing to offer the correct and fully explained options list. But then again, if they wanted to correct it, they'd pay a wordsmith for a more intuitive read.