[richard in NC]

A few have asked for comparisons with an X5. I can provide some insights.
My X5 was a loaded '11 50i M Sport compared to a '13 X3 35i M Sport.

X3 pros: The X3 is smaller and feels more nimble. The X5 felt big in comparison. I just got 28 mpg on a long highway trip, the X5 couldn't crack 20, unless downhill. The X3 dynamic suspension has more range between soft and firm, plus the steering and throttle adjust too, but not on the X5. The X3 is very quiet and luxurious sounding when running around town. The X3 gauge cluster is more modern and has an oil temp gauge. I like the traditional thumb wheel to adjust the vent temp. Going into iDrive twice a day to adjust it in the X5 was a pain. To warm in the AM and back to cool on a hot day. The X3 M Sport has a heated wheel, but not in the X5. The X3 has the paddle shifters that weren't in the '11 X5. The X3 interior was given more thought for daily use, especially the back with bag hooks, dark materials, and a kick plate. The tan plastic in the X5 got marked up easily. Lastly, the X3 costs less and is a better value overall.

X5 pros: The biggest X5 pro was the super wide Bridgestone Dueller summer tires and the active roll stabilization. With no lean, the X5 had remarkable grip in corners for such a large heavy vehicle. I could chase an M3 on the twistiest of roads. The X3 Goodyear AS tires are a disappointment in comparison. Plus you need sport+ to corner as flat. I had the compact spare added to the X5, no option in the X3.
I had the nappa leather and leather dash in the X5, it always got remarks on how nice. The 20 way comfort seats in the X5 are remarkable but the sport seats in the X3 are pretty good on long trips too. The X5 had a few more luxury features such as auto power tilt wheel and auto seat side bolsters that would release on exit and return to the preset position on start up. The 4.4 TT V8 had tremendous low end torque and was easier to be quick off the line and for merging. It also had a unique growl when punched. But the X3 35i is pretty quick too when allowed to rev through the gears but is smooth and quiet when cruising. My X5 came with the rear entertainment off the lot. A rather expensive option that never got used. <no kids>.
There are other minor differences such as different cruise and steering wheel buttons are just differences to get used to.

Bottom line: The X5 was a leather lined brute of a vehicle but the X3 is a better all around daily driver.