BMW prefers to call their AWD vehicles Sport Activity Vehicles; the emphasis really is on the sport more than the utility. Fittingly, we've always said that if you want to take your SUV to the racetrack, choose a BMW X5. Now we'd have to modify that to say the 2007 X3 may satisfy that need even better.
The biggest difference between the pair is the X3's lighter weight. This 600-pound savings contributes mightily to an increased feeling of nimbleness. Few other vehicles in the X3's segment can offer this level of performance at the same sub-$40,000 price.