The E60 M5 was a fine automobile -- thoroughly enjoyed it and rank it up there with one of the best performance sedans I have experienced. If it had a weakness, it was the SMG. Most everyone gets used to/learns to compensate for the harshness of the SMG. However, comparing them side by side, the DCT in the M3 is definitely superior. Most of what I read about the new M5 says it will have the DCT.
I have driven the Audi competitors to the M's, and they are fairly impressive but, in my humble opinion, not the equals of the M's. Also have driven the Mercs, and they are big, impressive engines if that is what you are after. Still think the M cars are a more complete package.
All that said, if I can't find a nice used M3 before too long, I may eat all my words, and look back at some of the competition.