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I am going to give a bit differing opinion. If the XC90 runs good, I would keep the Volvo. What you would save in fuel cost, you will probably loose many times over if you trade in the Volvo to a X5. The 2008 XC90 V8 is a pretty good vehicle and should easily last you 150+k miles. Also, the XC90 is much more practical vehicle (i.e. more ******* for your wife to drive around with the kids and their stuff.
When it comes to 35i vs 35d, I am biased towards the X5 diesel. We've got two of them...
By the way, have you looked at the VW Touareg diesel? A worthy contender to X5, especially if you are looking to buy used (lower resale value). Not as sporty as X5, but a very nice vehicle indeed. Good luck!
EDIT: I wrote s-p-a-c-e), why all the ******?
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