I have driven both... I own an M5 and my parents have a 540i. The V8 is cool, has loads of off the line grunt, but lacks the high RPM feel and sound of an M5. The V8 fits the E39 well, it's super quiet, and a pleasure to drive. If you want to get pulled back in your seat at 7000+ RPM then the M5 is your car. Also, you can chip it and pull off the cat on the M5 and produce around 330hp. I put a 3.8L euro in mine (340hp stock) mine is about 380hp. Good luck.