The Good: The 2006 BMW M5 packs a 500-horsepower wallop from its state-of-the-art V10 engine, with extensive electronic transmission and chassis controls complementing the power well. Interior appointments befit the upscale price tag and tech-oriented mission. The Bad: The sequential manual gearbox (SMG) is best suited for the track but is the only choice available, thereby joining iDrive on the list of BMW "improvements" that can't be avoided. The Bottom Line: The 2006 BMW M5 will appeal to cutting-edge speed demons who are willing and able to master new technologies. Once the transmission has been mastered, performance is stunning, with plenty of comfort features to boot. The 2006 BMW M5 is a tech-savvy speed freak's dream come true. Its Formula One-bred engine, which has collected two consecutive International Engine of the Year awards, is the most delectable bit, with the seven-speed sequential manual gearbox (SMG) and various chassis control systems complementing the power to provide truly awesome performance. The transmission does take some getting used to and still occasionally confounded us even after considerable seat time in both the M5 and the M6, but with experience and an understanding of the manual vs. automatic settings, a smooth drive is possible. Clearly, though, the SMG is most effective and transparent when pushed very hard, and given the M5's performance potential, this is impossible on public roads. Visually, the M5 doesn't set itself apart too dramatically from the current non-M 5 series upon which it's based, but is discernable by larger standard wheels; front, side, and rear lower body enhancements; more aerodynamic side mirrors; four chrome-tipped exhaust outlets; and a side vent adorned with an M logo ahead of each front door. In darker colors, such as the Indianapolis Red Metallic of our test car, the effect is positive: the car looks purposeful, but it didn't draw much attention from other drivers or passersby. With a base MSRP of $81,200, the V10-engined M5 is still something of a performance bargain, as the engine alone is uniquely valuable both as a power plant and for bragging rights ("yeah, but your Ford GT doesn't rev to 8,000rpm"). As usual, generous ticking of the BMW options list takes a toll, and with major options such as Sepang Bronze Perforated Leather ($3,500), multifunction seats ($1,900), a heads-up display ($1,000), and comfort access ($1,000), the total runs to a hefty $94,965, including a $695 destination charge. Sitting in the 2006 BMW M5 for the first time and taking an initial look around at the trim and controls, little is different than in other modern BMWs. The main gauges, iDrive controller, hooded navigation screen, and climate controls are nothing new. But looking closer, clues emerge as to the more serious nature of this particular M5. The steering wheel is thick and stitched with three-colored thread matching the M logo colors. The SMG gear selector isn't a giveaway, as it's available in other BMWs, but some of the buttons in a row behind it are new. Two of them control the multifunction seats. These feature adjustable side bolsters that can be set to react in concert with vehicle dynamics, with the outside bolster "gripping" the seat's occupant during hard cornering (a system called "active bolstering"). Our car's front seats were also heated (standard) and cooled (an $800 option) through their full leather. The seats are comfortable and provide plenty of side bolstering at their regular setting; active bolstering is an interesting novelty but can be distracting while driving. The $1,000 comfort access option allows entering and starting the vehicle without using the key fob, a worthwhile convenience we've appreciated in all test cars that have come so equipped. With the foot on the brake and the SMG lever in neutral, a tap of the Start\/Stop button brings the V10 to life. iDrive allows customization of entry\/exit options such as how long exterior pathway lighting stays on following exiting the car, the central locking sequence, whether the car beeps and\/or flashes upon locking or unlocking, and all manner of other minor options. iDrive again proves something of a double-edged sword, as we and others have previously noted ad nauseam. It offers simplicity and elegance of design but also requires too much effort for minor control modifications. Despite being in its second generation, iDrive still proves to be something of a challenge. Overall, the premium sound system leaves little to be desired, with Logic7 surround, a six-disc changer in the glove box, and a single-CD slot in the dash, 13 speakers including 2 subwoofers and digital sound processing. No provision is made for factory integration with auxiliary audio components, but iPod adapters are available from dealers. Sound is strong and adjustment options are effective, with three main modes (normal, concert hall, and theater). One complaint was that the CD magazine in the glove box is tucked far up and out of sight, where it is all but unreachable by someone sitting in the driver's seat at full stretch, let alone while driving. Bluetooth hands-free cell phone integration is standard as part of the BMW Assist package. We were unable to get a Motorola Razr to pair with the car by digging around in the iDrive, but by using voice commands, other testers reported easy pairing and solid call quality on outgoing and incoming calls thereafter. As with other BMWs, a list of approved phones recommended for use with the car is available. The voice control system also proved effective in controlling the navigation system, although inputting destinations requires the use of iDrive. Storing names and phone numbers using voice commands is straightforward. The menu displays on the main nav screen are as crisp and readable as those we've enjoyed on other BMW systems, with enough processing power to eliminate any delays in menu switching and map zooming. BMW's GPS navigation is easy to read and fast at calculating routes and able to plot destination by a mixture of voice commands and iDrive inputs.The heads-up display is slightly different from the one we saw previously in the 550i. This version includes a tachometer depiction showing green, yellow, and red areas of an arc that wraps around the number indicating the current gear, so shifts can be executed at maximum revs without having to glance down at the main tach. As with the earlier heads-up display, current speed is also displayed, along with any vehicle warning messages. There is also an M mode that displays only the gear and the revs. The use of this mode is customizable as part of the M-Drive settings. The M5's heads-up display includes a virtual tachometer as well as information on current speed and gear.Satellite radio prep remains, alas, a $595 option in even the priciest BMWs. Sirius is BMW's provider of choice, and we noticed more drops and skips in the signal in both the M5 and M6 than we remember from either satellite system in any car we've tested previously, although we were driving in hilly and\/or downtown conditions much of the time. A glass moonroof and pull-up sunshades on the rear windows are standard on the M5. A power sunshade for the rear glass is another pricey option ($575) but proved useful during some unusually warm summer weather between San Francisco and the Monterey peninsula. Also helping keep things cool in the cockpit is parked-car operation of the ventilation system, customizable to blow warm air out of the interior at set times while the car is unattended. The engine in the 2006 M5 is a mechanical and technological tour de force. Rated at a maximum of 500 horsepower at 7,750rpm and 383 pound-feet of torque at 6,100rpm, it certainly produces prodigious power, but the engine's willingness to rev is the most startling aspect of the experience. With five liters of displacement, continuously, or "steplessly," variable timing on 40 valves, and electronically controlled throttle bodies feeding each cylinder individually, there's a lot of precise hardware to get working in tandem, yet response is immediate and the M5's V10 pulls to beyond 8,000rpm. A five-liter, 40-valve V-10 engine gives the M5 awesome power. We thought that 8,000rpm was an impressive redline for the two-liter fours in the Acura RSX Type-S and Honda Civic Si; in this car it borders on astounding. A very cool touch is the variable redline indicator, which moves around the outside rim of the tachometer, starting at about 6,500rpm when the engine is dead cold and moving to its fully ready position around 8,000rpm once the engine warms up. The single biggest control difference between the M5 and any other 5-series is a very small button among the other steering-wheel controls, called the M-Drive toggle. M-Drive is a catch-all mode representing the custom settings of six other systems: the SMG, electronic damping control, dynamic stability control, engine power mode, active bolstering, and the heads-up display (the last two if applicable). In practice, all this translates to a means of instantly switching into hooligan mode and back to normal at the press of a button, and we loved it. iDrive itself might benefit from more control logic of this type. We know the point is to make everything controllable through one knob, but the star-symbol button on the steering wheel below the M-Drive button can be customized to perform one iDrive task, and a couple other buttons like this would be nice. The M-Drive setting allows drivers of the M5 to switch into hooligan mode at the touch of a button. There is simply power and torque available everywhere up and down the rev range, enough to overwhelm the tires in the first three gears if you're daring enough to disable the dynamic stability control. And of course, you are, because this is the only way to get the transmission into Sport mode 6 for the quickest shifts. With this mode selected, the electronic damping set to Sport, and the engine in P500 Sport mode where it produces 500 horsepower and extra-quick throttle response, the M5 assumes its purest form and the results are breathtaking. Full throttle shifts are lightning-quick with no chassis disruption, and SMG earns its keep. Downshifts are accompanied by an attention-getting throttle blip, which either amuses or impresses most people when rolling to a city stop but definitely helps maintain stability and avoid any unsettling wheel spin in fast midcorner changes. With seven forward gears to choose from (an industry first for a clutch-shifted production-car transmission), so many shift programs available, and unflappable grip at any reasonable speed, getting to know the M5 is a pleasure indeed. For more sedate driving, however, the M-Drive button is pressed again, and the standard P400 (400 horsepower) engine setting is reengaged along with the other dynamic settings in their prior places. In slower driving and finesse maneuvers such as parking and hill starts, SMG can become a nuisance if the driver isn't used to it (and yes, sometimes even if the driver is). The expectation is that putting the transmission into Drive mode at the least sporty setting will make it behave like a normal automatic, but instead, shifts are prolonged and very noticeable at anything but the lightest throttle inputs, and booting the throttle at the wrong time can produce a seriously unpleasant kick in the back. We found that the smoothest around-town driving was realized with the transmission in a midrange mode (it automatically resets to mode 3 of the 5 normal modes each time the car is started), and that shifts can be smoothed out by using the throttle as if driving a conventional manual, that is, letting off briefly while declutching happens and encouraging shifts this way. Parking takes some practice, as it can feel frustrating to goose the accelerator and wonder if your electronic friend is going to slip the clutch a little at the right time. Concrete walls and curbs loom large when still learning to feather the throttle to good effect. Hill starts are much simpler, as a depression of the left-hand shifter paddle will automatically hold the brakes on an incline for about a second before the car begins to roll backward--plenty of time to move onto the throttle and get underway. This worked fine on some steep San Francisco streets, although maintaining uphill momentum once underway was a skill we never quite mastered. A quick flick into Sport (sequential) mode would solve this, of course. Braking is similarly impressive, with the standard 19-inch wheels providing room for four cross-drilled and vacuum-ventilated discs with ABS. Fuel gets consumed about as quickly as expected, with the trip computer reporting between 12mpg and 13mpg during our week's driving, against the EPA estimates of 12mpg in the city and 18mpg highway. Your $94,965 also therefore includes a (deep breath) $3,700 gas guzzler tax, so you might as well enjoy it, right? BMW provides the usual array of standard safety features to protect the occupants in the event of a mishap. No government crash-test ratings are available for the M5. Front dual-stage dual-threshold "smart" airbags with passenger detection are standard, as are door-mounted front side airbags and a front and rear head-protection system. An interlocking door anchoring system provides extra protection against side impacts. In a serious impact, major electrical components are disconnected from the battery, the hazard and interior lights are activated, and the doors are unlocked. Park-distance control is standard, showing BMW's usual overhead pictogram of the car with auditory warnings and glowing onscreen zones indicating the general position of objects behind. With the navigation system standard on the M5, BMW could also pair the monitor with a real rear-facing camera, but this system is mostly effective and can be configured a bit with iDrive or switched off completely with a dashboard button. The M5 comes with BMW's latest color-coded park-distance control interface as standard. Dynamic stability control, an all-season traction system and a variable differential lock improve handling and assure grip in bad weather conditions. Antilock brakes are standard, with adaptive brake lights that light up more brightly under sudden heavy braking. Adaptive autoleveling headlights and rain-sensing wipers, which impressed us in our test of the 550i, are also standard. A tire-pressure monitoring system alerts the driver to drops in psi at each corner and is calibrated via iDrive. BMW offers its usual four-year\/50,000 mile warranty on the 2006 M5, extendable by original owners to six years\/100,000 miles for mechanical breakdown coverage. Also included for four years or 50,000 miles is all scheduled maintenance and replacement of wear items, though presumably not tires. Rust-through coverage is for 12 years.