What are they like in terms of reliability?? would it be worth opting for the BMW 530i sport instead as they are not quite as fast and maybe more reliable?? what do you reckon??

Never had an E39, but I had the previous two generations of 5 series, my experiences were E28 good, E34 bad.
What often cripples these cars is electronic failures, not just the ECU, but all the toys can play up, costing hundreds to fix, and there are plenty of toys on a 540i, I'm sure!
I'd still buy one though, the E39 was for a long time the king of executive cars, and in light of the 'interesting' styling of the current car, is still sought after in good condition. Don't think the V8 is any more or less reliable than the 6, but it's not much faster, and will cost far more to run. I'd quite happily drive a late model 530i Sport, metallic black with cream leather and M5 alloys. Take the badge off and no-one will know....