We drove both the 528i and X3 35i -- both equipped with sport package/seats. The 5'er definitely had the higher quality interior, with better materials and features like the motorized wheel (X3 is manual adjustment only), but the X3 was by no means terrible! We actually found that the X3 offered a little more legroom and the 5'er can't be outfitted with a panoramic roof.
As others have mentioned, the X3 has a huge price advantage as well.
We also drove the Lexus RX350. Nice vehicle if you want a soft, cushy ride. It definitely offers more space than the X3, you can recline the back seat, and it's a little cheaper too. But the brakes were too spongy and the drive too boring! There's a reason why it's the #1 choice among soccer moms.
Didn't care for the tech Lexus offers either.