I have had my 520D for a year now, and every now and then I think about "what if" I had a 535D instead. However, a 530D is 12000€ more than a 520D and that translates to roughly 200€ more every month, on top of the 800€ it already costs me.
I think my car really has improved engine wise after it's 30000km. It is now more refined and vibrates less.
Consider BMW has a kit for it to get more BHP with all warranties intact.
If you don't like spending "too much" money, get the 520D, it is a great alternative.