Well - I might just disagree with everyone here. I bought a new M3 in 2005. From that I went to a new M5 in 2009. The SMG in the M5 was 10 times better than the M3. I also now have a M3 CSL and the E60 SMG definitely blows the E46 CSL SMG away.
Fuel - well I drove mine around Napier with odd trips away. I did about 20km in 2 years. I found it averaged at about 19l/100km around town and 12-14 on the open road at 110 km/h.
Overall I loved the E60. The noise is amazing and it is very capable. I was sad to see it go, and some times even have crazy ideas about buying another one just to keep in the shed (I probably will when prices stop falling).
The cost of running one is a little unknown to me as I purchased new, however I did do a clutch under warrenty after 5km. This was however just after a track day with many launch controls and towing a 2.2 ton boat over the Napier to Taupo road, so maybe not all a car issue.....
I now have a F10 M5 and the new DCT transmission blows the old SMG away agin. The new M5 is bloody great........
When I went from M3 to M5 I felt the difference was quite big and comfort was a lot better in the M5. The E60 M5 has arguably the best ever M engine ever produced. The V10 was a fantastic piece of kit.
There are lots of stories about big bills, so if you do go the M5 make sure you can afford any issues etc down the track. Also i would suggest a very very good PPI from a BMW dealer..... Good luck!