Yes the ride is somewhat harsh, but considering the handling, it's not unbearable, particularly on Highway driving. We have 110k mile on our 2005 X3, my wife drives it every day and is very pleased. It is also comfortable on long trips. We do prefer a firmer ride, so I really think you have to make that decision with some test driving, making sure you drive it on roads that you expect to encounter. At the end of the day, this is personal preference.
As far as reliablility, our car has been very reliable. The only notable repair has been a recent ignition switch replacement. Of course, I drive a 2003 525i, so not much would surprise me on the M54 engine. I have done all of the maintenance personally, but that has been limited to all fluids (including transmission).
If you are experienced with BMWs and are satisified overall, I would consider the '06. reading this forum, it does seem that this year is one of the "sweet spots"