After a second round of test drives, I decided on a X3 3.5i M-Sport with Dynamic Handling. For me, it's the best compromise in terms of space requirements and performance. I was initially leaning towards the 2.8i, finding its performance more than adequate for the daily driver. I ultimately changed my mind, finding the 3.5i more refined and relaxed. My only remaining doubt pertains to the runflats. While I don't mind changing them out, I do mind the lack of space for a spare (did so with e60 & clubman, but they had room for a spare). It's a risk I willing to take, knowing I might compromise the storage area with the addition of a spare tire. Hopefully, the new X3 will be here in four weeks or so.
In terms of some other thoughts….
X5d - Enjoyed the engine performance, but I wonder if the clatter will be fatiguing. The ride quality was not great and it just wasn't as much fun to drive as the X3. It was too much of a compromise for the added space.
Touareg - Surprised I like it as much as I did. I found it nicer than the X5 or ML350, offering a better trade-off between handling and ride quality. VW's diesel engines are also impressive and I can see my next family car having a diesel engine. It was never a serious contender, though, because they lease so poorly. It was well above any of the other cars I was considering.
GLK - I still like it, but the back seat is just too tight for kids coming and going. It wasn't as engaging to drive as the X3, but notably nicer than my current Q5. Appearance wise I prefer it to the X3, especially the new interior design for 2013. I may have compromised on space if I knew the diesel would be out sooner. At this point, I don't want to wait until early next year, especially since dealers don't know if that means January or early Spring.
E350 - I still considered an E350. If kids were not a consideration, it would have been my choice. It's not a sporty and entertaining as the X3, but it's more comfortable and engaging than the new 5 series.
Thank you for sharing your thoughts on this thread. These forums have been a great help.