clutch versus videogame controller?
I own an E39 M5 and an E60 M5.
There is something more organic about communitcating with your car with a manual transmission. The E39 feels like it has more torque at lower RPMs and there is something about a clutch that is beautiful and raw. It is in many ways a more satisfying drive.
The paddles on the E60 are like using a videogame controller-- you push a button to change gears. There is obviously no clutch and I personally feel it is a less engaging way to access the 500hp engine. I only use auto mode when I am on the phone or in stop-and-go traffic because it blows. It really sucks to be in limbo mode between 1st and second gear. In the higher gear shifts it is relatively seamless.
On the more positive side of things; SMG shifts are cleaner, quicker, easier and downshifts sound fantastic! The car feels like it was meant for this transmission, period. When you drive the car you will know what I mean. You get used to the paddles and I would have to say that after driving the E60 for a couple of weeks now, a stick would feel out of place bigtime-- it's not right for the car regardless of how awesome it would be to control the V-10 directly. It would be like mating an atari joystick to a playstation two.
My great respect for the M division gave me no qualms about buying the SMG. They love what they make and they made the E60 M5 for SMG only, just like they made the E39 for a stick. They're the artists who created this gorgeous beast, I say go with the SMG.