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I love the X5; but we actually turned in a Touareg and went to the 535 and have two car seats in the back with really no problem. I'm 6'4"; and so the little guy behind me doesn't have a ton of space (i programmed a seat setting for when he's in there); there is certainly enough room.
I will say the pain the ass is bending over to put kids in the seats... but if you can live with that and prefer the sedan do it.
It's a pretty sweet dilemma to have though. And I think the X5 has a much better resale value. But if you wanna do some mods; I'm thinking the 5er is best.
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