Hey Peter...
Well, to her, its just an SUV... We were initially in the market for an X5, M sport... I ended up selling the ZHP right around the time we were looking, and I got a lot of money for it... I also ran across our X5///M right around that time. The deal seemed to good to pass up, so I jumped on it. We decided to try out having 1 car, and it was the perfect blend of utility and performance... Lots of both! :) However, it was a bit of an impulse buy, and I didn't research it enough... It ended up costing us a lot of money in maintenance the first year we owned it... But, we finally got the thing ironed out and all is good now. I really love how it drives like a performance vehicle when I want it to, yet its plenty big enough for the whole family...
General things on the E70... The steering is very heavy... If your wife is a dainty little thing, she might hate that. Ours has the optional 21" wheels with the 285/35-21" tires, so its a lot of meat to turn, but still its very noticeable. Also, the E70 in general suffers from pretty crappy interior quality. Lots of creaks from the interior panels and stuff... A lot more than even my ZHP had (my ZHP was unrealistically tight and quiet though...)
If you go with the V8, plan to make sure of a few maintenance things, there have been a few recalls and other issues that BMW has worked on, so you'll just want to check into that... The X5///M has never gotten any love in terms of recalls or the recent N63 Customer Care Package (google it if you need), until just recently when they decided to release the "service bulletin" for the injectors (basically a recall...).
So, assuming you get one with all of the maintenance done, go for it. The performance is unreal, yet it drives just fine with the wife at the wheel. It is an absolute pig on gas, but the fun is worth it. Its actually quite comical to completely annihilate unsuspecting guys in some cars...