Had both, put insane amounts of money into my 540 to make it faster, handle better, stop better, than an m5. Great journey with my first car, loved it. Test drove an m5, and all of a sudden i didnt care that it didnt make as much rwhp as my 540 or anything else for that matter, walked away with the car on the spot. The m5 is the greatest car i have driven in my short life, and if you think it cant get better than your 540...give your left foot a go in an M5 and thats all it will take!
Edit:
Notable things to differentiate between the two:
1) Engine, looks good, feels good, sounds good
2) Interior and exterior, leather and alcantara everywhere! The exterior is sporty but suggestive, quad pipes, m-mirrors, 18 inch wheels, sport bumpers
3) Suspension, stiffer than a 540 sport, still very nice for daily driving and the occasional tussle with some curvies
4) Prestige(not snobbery but being proud), i never understood this when i had my 540, but the m5 is admittance in to a rare club, even rarer than the 540! M says it all
5) This should be number one, but, the overall experience, just amazing.
There are plenty more i am sure but there are some for you...