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BMW xDrive is BMW's four-wheel drive system that is found on the X1, X3, X5, and X6 crossover sport utility vehicles. It is also optional on the 3 Series (2003-present), 5 Series (2005-present), 6 Series (2012-present), and 7 Series (2010-present).
xDrive is standard equipment on the X1, X3, X5, and X6 crossover sport utility vehicles. It is also optional on the 3 Series (2003-present for sedans, 2007-present for coupes), 5 Series (2005-present), 6 Series (2012-present for coupe and Gran Coupe), and 7 Series (2010-present).

BMW gradually expanded the availability of xDrive across its whole lineup to better compete with Audi's quattro and Mercedes-Benz's 4Matic, the latter two which are widely available across their respective offerings. As of the 2010-12 model years, BMW Canada has even stopped offering RWD trims if an xDrive counterpart is available for its 5 Series, 6 Series, and 7 Series cars, a major reversal from the 2009 model year and prior where only the BMW 528i and 535i were available with xDrive. BMW Canada's switch has surprised some observers, as AWD was "once the sole purview of Audi with a few odd-duck Mercedes mixed in, the switch to AWD is so strong that many luxury models are now predominantly AWD, though the 650 is the first high-end sport coupe defection among BMWs. Even more surprising is that the Coupe will only be available in AWD guise; if you want a 650 that powers only the rear wheels, you'll have to opt for the ragtop version."[2]

xDrive was introduced in 2003 with the new X3 and the refreshed BMW 3 Series (E46).

The first application of xDrive on V8-powered BMW cars (as opposed to crossover sport utility vehicles) was on the 2010 BMW 750i xDrive (F01), 2010 550i Gran Turismo xDrive (F07), and the 2011 BMW 550i xDrive (F10).

xDrive was first used on BMW M vehicles starting with the 2010 BMW X5 M and X6 M. BMW also confirmed that they are looking into producing a BMW M5 with xDrive, although an availability date has not been confirmed
Before xDrive, BMW offered 4WD as an option in the 1980s for the 3 series and the 5 series. The system had a planetary center differential with a permanent 38-62 (front-back) torque split. Both the center and rear differential had a viscous lock which would engage automatically if slippage occurred (one shaft rotated at a significantly different speed compared to the other). The front differential had no lock of any kind.

4WD was again offered for the X5 and the 2001 3 series. The system was similar to the earlier system except without any of the locks. Instead, slipping wheels would be braked with the DSC system, helping transfer power to the wheels with traction.
http://en.wikipedia.org/wiki/BMW_xDrive