The X5 has below average reliability, but not horrible... just below average.
Automatic transmissions have been a rough spot for BMW; however, someone posted that a 2007 internal upgrade was made to improve the reliability.
As for an extended warranty, I would wait on it since you have 4 years from BMW. With no utility for an extended warranty for four years, why buy it now? You could decide to sell the X5, or even, heaven forbid, total it in an accident, before the four years of warranty are up.