Thank you too both, halltristan and x3brian.
I have done some of the same maintenance work to my E46 and have considered the 06 or 05 models because of the similarities of having the same M54 engine.
The 07 models gas mileage was / is of interest, but not worth the possible extra headaches of other major problems. I am assuming that both of you are happy with the modle year you selected. One of the reasons that I am interested in the X3 is so that we can get a small trailor for picking up home improvement supplies and endless shopping needs from my wife. I have no interest in adding a tow bar to my E46 and her car, a 08 VW EOS, is not made for this either. I haven't seen too many X3 with trailor hitches, is this vehicle adequate for pulling a small light weight trailor?