The Good: The 2008 BMW 535i drives like a dream, getting power from its brilliantly engineered, twin-turbo, 6-cylinder engine. The integration of live traffic with the car's navigation system is the finest we've seen; its hands-free cell phone system is top notch; and the audio quality from its premium sound system is excellent. The Bad: The stereo doesn't show ID3 tag information from MP3 tracks. Destination entry on the navigation system isn't as easy as it could be, and it doesn't default to a map display. The Bottom Line: The 2008 BMW 535i is a really exceptional car, offering a great driving experience and an impressive array of electronics in the cabin. From its shifter to its live traffic system, its innovative features should make any techie drool. Photo gallery:2008 BMW 535iThe 2008 BMW 535i was love at first drive. And while we do have to admit to a BMW bias, we always thought of the 5-series as a family car. But no more. Once behind the wheel of the new 535i, we felt its silky, smooth power and the strong kick from the twin-turbocharged, 3-liter, straight 6-cylinder engine. Although designed with a little understeer, the 535i handled hard corners well, with the rear end giving a satisfying kick out. And unlike many other cars, the 535i didn't let us down in the electronics department--its beauty extends beyond the road. BMW is incorporating a new live traffic reporting system into its navigation, which, though not perfect, is the best we've ever seen in a car. Add to that excellent stereo sound and one of the best Bluetooth hands-free cell phone systems available, and the 535i starts to sound like a tech dream come true. Although our love didn't fade during our time with the car, some of the 535i's idiosyncrasies became less than endearing. For example, we've learned how to use iDrive, and can make it do whatever we want, but it's not our favorite car interface. The navigation system's quirks made it less usable than it could be, and try as we did, we couldn't get our average fuel economy above 20mpg. Test the tech: Rush hour Generally, we stay as far away from traffic as we can. We don't commute to work by car, and we mostly do our test driving on weekdays between 10 a.m. and 3 p.m. But with the 535i's live traffic feature, we plunged right into the evening rush-hour traffic. There are currently only two live traffic systems available in cars: one delivered by XM satellite radio, and the other through Clear Channel's FM radio network, using RDS. We tested the former in the Acura TL. The navigation system shows that we've got slow traffic on Highway 92.The 535i uses live traffic delivered by Clear Channel, a standard feature with the navigation system. Clear Channel gathers traffic data from local traffic authorities, incidents reported by first responders, and a number of other sources. Traffic flow data is provided by a company called Inrix, which uses historic patterns, real-time data gathered from fleet vehicles, and local events, such as baseball games. The upshot is that this live traffic feature has traffic data for roads that aren't monitored by traffic authorities. We set out from CNET headquarters at 4:30 p.m., driving south on Highway 280. We turned west on Highway 92, even though the navigation system showed slow traffic on the road. Sure enough, we slogged up the road behind a line of cars going about 25mph. Highway 92 is not monitored by CalTrans, the regional traffic authority, but it's frequently slow, so the navigation system was probably relying on historic data. At Skyline, we turned south and got to speed along mountain roads for bit, until we hit Highway 84 and turned east. The navigation system showed no problems, so we drove down to El Camino Real. At this point, we set a destination in San Francisco. The navigation system calculated the route, then immediately told us there were traffic problems ahead, and dynamically changed our route from Highway 101 north to Highway 280 north. The traffic is definitely backed up on 280, but the navigation system shows it's clear.On the approach to San Francisco on Highway 280, we hit traffic that wasn't reported by the navigation system. After a quarter mile we passed its cause--a minor accident--and saw the navigation system start to fill in slow traffic icons behind us. This particular traffic problem was too recent for our traffic service to register and report it. Once in San Francisco, we noticed one other flaw in the system. The map showed slow traffic on Van Ness Avenue running north through the city, but the route guidance still tried to put us on this road. With our local knowledge, we took Franklin Street, which runs north and parallel to Van Ness, and usually has less traffic. In the cabin Although the interior of the 535i is pleasant, it doesn't feel luxurious. Rather, it leans toward functionality. The steering wheel is nice and thick, making it easy to grip when pushing the car around turns. Wood accents in the dashboard clash with the futuristic-looking electronic shifter for the 6-speed automatic. And the incredible array of power adjustments on the seats seems more about getting into the right driving position than about comfort. We were impressed that we could even raise and tilt the headrests with a switch. We were also impressed with the wide-screen LCD in the dashboard, which shows a main screen for whatever function you are using, and an auxiliary screen, which can be set to always show a map or trip computer. Of course, the whole system is operated through iDrive, which may cause some people to despair. But we've gotten pretty comfortable with the system, and were able to use it handily, making no mistakes and generally finding what we were looking for. We had some issues with the system, but these centered around how individual functions were programmed. The navigation system offers detailed information about each traffic incident or slowdown.The two things that bothered us most were the map display and the audio settings. When you select navigation, you have to push down then turn the iDrive knob through three selections, and then push it down again to see the map. We think the map should come up as a default display under navigation. Likewise, you can't reach the audio settings from the entertainment menu. To change audio settings while selecting music, you have to push the menu button, then push the iDrive knob down, then down again to get to the audio settings. There should be a shortcut from the audio selection screens. We tried the voice command system as an alternative to iDrive, but were initially frustrated when the system wouldn't recognize any of our commands. We eventually got it to work, however. It worked for changing CD tracks, but we could never enter a complete destination into the navigation system. Instead, it worked better if we gave it top-level commands to get to the function we wanted to use, and then used the iDrive knob to fine tune. We talked extensively about the live traffic system above. We liked some things about this navigation system, but not everything. Its map resolution is great, and we like how it shows many street names. But we didn't think much of its route guidance graphics. Destination entry was also harder to use than on other systems; it only lets you enter destinations through an address, from the map, or with a point-of-interest location. Other systems we've seen have more options, such as finding a freeway entrance. Its point-of-interest database, while fairly complete, wasn't easy to use as it had too few top-level categories. As for the stereo, we were very impressed with its audio quality--which isn't surprising as we had the optional Logic7 system, which uses 11 speakers and two subwoofers. This is sound that you can feel. The bass is strong and the overall quality is rich, with decent clarity. Among the audio settings is a 7-band graphic equalizer, along with basic treble, mid, and bass levels. There are also two digital sound processor settings. Concert Hall puts the music in front of you, while Theater enhances the surround effect. BMW offers all the audio sources you could want, from an auxiliary audio input (strangely mounted behind the console), to satellite radio, to a 6-disc, in-dash changer which reads MP3 CDs. There is also an optional iPod connector and an HD radio tuner, which we had on our test car. We found that the HD radio enhances the audio quality a little bit, but it doesn't increase range or get rid of static. With this high-tech system, we were surprised that it didn't display ID3 tagging information from our MP3 CDs, but only showed folder and file names. Pair your phone with the car, and it shows your phone book contents.The Bluetooth hands-free cell phone system is top notch--and it's standard. We particularly like this system, because it displays your cell phone's phone book plus recent calls. Its call quality is also very good. For some extra tech features, the 535i has park distance control, which displays front and aft obstructions in a graphic on the LCD. There is also an optional lane departure warning, which we haven't tested since it wasn't included with our review car. Under the hood The 535i's cabin electronics impressed us, but the tech under the hood got us excited. The 535i uses the twin-turbocharged, 3-liter, straight 6-cylinder introduced in the 3-series last year. This power plant is every bit as capable in the 5-series, putting out 300 horsepower at 5,800rpm and 300 feet per pound of torque at 1,400rpm. BMW's specs show that 535i, with an automatic transmission, can go from 0 to 60mph in 5.7 seconds. It felt a lot faster than that, but we didn't get a chance to do our own measurements. We found the car clocking close to 90mph on the freeway before we realized it. The 535i moves effortlessly, and when called on for a burst of speed, it doesn't let down. With this power train, we can't imagine why anyone would buy the 550i. BMW competes with and surpasses all the 3.5-liter V-6s around by adding twin turbochargers to its 3-liter, straight 6-cylinder engine. Using the 6-speed automatic transmission shifter requires a progressive mindset. You can't be stuck in the past to accept this weird, science fiction-styled hunk of metal as a shifter. And you really have to be able to give up your old ways to use it. The shifter has a button on top, which puts the car in park. Push the shifter up for reverse, or down for drive, and you're on your way. Slip it to the side for Sport mode, and you can also push it up and down to go through the gears sequentially (we appreciate that you do push forward to downshift). The shifter doesn't feel mechanical--BMW doesn't try to disguise that each movement activates an electronic gear shift. Although we had a lot of fun pushing this car around hard corners on mountain roads, the steering has a somewhat suburban feel. It's not particularly tight, and there is noticeable understeer. But it kept its grip around the corners, at least until we pushed it hard enough to get the tail to kick out. At that point, traction control kicks in, and the whole driving experience becomes very satisfying, as the car lets you have fun without getting too dangerous. The shifter for the automatic looks like it came straight out of a concept car.We would have liked to get better fuel economy with this car. The EPA rates it at 17mpg in the city, and 26mpg on the highway. We had it stuck at 19.7mpg in our mixed city and freeway driving, even when we tried some easy freeway cruises to pump up the average. Emissions ratings aren't yet available for this car. As for design, the 535i is a classically European-looking luxury sports sedan. BMW Designer Chris Bangle's influence is apparent in the car's liquid-smooth surfaces. The front of the car is particularly intriguing, with flattened fenders to either side of a hood bulge that contours up from the grille. The rear of the car is ugly, with a diagonal line that runs down the sides of the trunk lid then along the bottom of the tail lights. That line makes it look like the back was sliced off, then hastily reattached with superglue. In sum We found few strikes against the 535i, but price is one--the 2008 BMW 535i has a base price of $49,400. Our test car also came with the Cold Weather package ($750), the Premium package ($2,100), the Sport package ($2,800), a smart key ($1,000), Park Distance control ($700), navigation ($1,900), HD radio ($500), and the premium stereo ($1,200). With its $775 destination charge, the total came to a hefty $61,125. It seems like a lot of money to pay, but this car drives like a dream. You can drive reasonably or you can drive hard, and the car responds well. Beyond some of the issues we found with the navigation system and the iDrive interface, the electronics in the 535i are excellent. For almost exactly the same money, however, you can get an Audi A6 powered by a 4.2-liter V-8. Although the A6 gets 50 more horsepower and has all-wheel drive, the 535i feels more agile and smooth.