Granger: we own a Toyota Sequoia and the LR3. The Toyota (03) has been reliable, but is a bit of a tank. We refer to it as a school bus. Seats 8 people, however, not an exciting ride. Has always been reliable.
The LR3 on the other hand is a lot of fun to drive. I have 6000 miles on it. Took it in for the computer update for the stalling issue and have had no other issues. Gas mileage took a little getting used to. My perception of reliability kept me from feeling really comfortable at first, however, I got over that shortly after the purchase. We have the SE, no nav, rear air, and 7 seats. I had to have NAV in my last vehicle, a BMW X5 and found that I just didn't use it.
In comparison to the X5, the X5 was a bit sportier, however the LR3 is more commanding in the city, and off road. Also, you see X5's everywhere, and they really are not that distinct. I have only seen 4 LR3's since buying in December 04, in Portland, OR. The LR3 despite the size accelerates well, has great turning radius and handles very solid.
Good luck with your decision. I like mine.
Mike