I tried both. It's not the seat type, but rather the location of the seat relative to the B-Pillar combined with my broad shoulders.
I had this problem in the past with another car, a Volvo S60, and we ended up getting rid of it for that reason. Though we like the X3 enough to give it another test drive, I'd hate to make the same mistake twice.
To be fair, there are a great many cars I cannot get comfortable in due to my proportions, but this is the first BMW and we were disappointed because we really like the X3.