Has anyone ever driven the X5 Diesel? That's a similar sized vehicle. Curious to hear how it handles.
I have driven the VW TDIs and they drive nice. You don't feel like you are driving a commercial truck engine and the acceleration off the line is great.
I became very interested in the diesel options available for large SUVs when I took a job requiring a long commute. While I want to be in the larger vehicle vs. an econobox, my commute is 400 miles a week in traffic (on top of personal driving). No, I haven't done the math on the cost difference of a diesel engine and diesel fuel vs. the increased MPG...but man, these $80 fill-ups every three days are depressing.
X5 35d would be a very nice way to spend that much time doing basic commuting. I like having a 2nd or 3rd vehicle specifically for the trips that are really just highway driving. Since 2010, about 3.5 years now, I've put about 75,000 miles on a BMW 535xi wagon which has a twin turbo inline 6 and manual 6 spd.
If you go with a BMW, I highly recommend the "20 way comfort" seats which are very nice for long trips or just lots of time in the car. Newer BMW 5 series and up will also have a ventilated option. It's very quiet even with the Dinan exhaust I put on and the Dinan ecu tune actually improved my fuel economy, as well as providing huge boosts for passing on 2 lane roads. (380hp / 420 lb-ft)
Anyway, if you're implying swapping an X5 for an LR3, they are not at all comparable for off road use or even rather rugged forest roads or deep snow. I'd have to say that in terms of true capability, the Subaru Outback or Forrester is probably more "capable" and has higher ground clearance!
If you like the idea of a TDI "suv" that also provides at least some "capability", then I'd steer very clear of the recent Jeep Cherokee considering all the issues reported with various systems, plus the overall GM recent nonsense.
However, I would consider some tdi suvs more capable than the X5 such as the VW Touareg tdi (with air) or Porsche Cayenne tdi (if optioned with the air suspension and PDCC). They use the same platform being both from the *** parent company. The Porsche has historically been available with more options for off-road capabilities even though few are used that way. The best place to learn more about the Touareg, from VW lovers, is on the "Clubtouareg" forum which I was active on for a while having had a V10 tdi. those used are very good values too. Last year model for V10 tdi was 2008. It was available with a locking rear diff which mine had and it worked incredibly well, on demand/user controlled. Center locking diff was also user controlled and standard feature.
2009 was first year for v6 tdi and it retained locking rear diff optional, last year for that feature! 2010+ tdi Touareg could be "4motion" with locking center I think, and air suspension but no locking rear anymore in the north american market.
Currently the Porsche can be bought as a v6tdi automatic but also as a v6 naturally aspirated v6 and 6 spd manual. I think it's petty cool you can get that engine with 6 spd, and a multitude of options such as air suspension, ventilated seats, and PDCC (amazing suspension control that unlocks the sway bars for off road use but tightens them for fantastic highway cornering, a little like the Toyota KDSS in results).
You could also consider something like a VW tdi wagon, a gold tdi, or spend 2-3 x on a new BMW 328d wagon

for the commuting. Long term the 2 car arrangement works out financially to me because you use them for purposes more suited to the design and they both last longer due to the use spread over longer term. There are extra costs in operating 2 vehicles at the same time such as redundant insurance and licensing however that could be offset by using the efficient vehicle for the commuting intensive time and the 4x4 just for the trips requiring it even if that means short outings where you camp out of the vehicle and like the extra space.