Here is the difference I have experienced between the BE3 and X-Reality Processor. I have two Sony High-Def TVs the bigger and older EX400 comes equiped with the BE3 Engine. The EX400 Served well in all aspects before I found the CX520 32'' Inch equipped with X-Reality Engine.
First and foremost the newever Bravias with Internet Features will all come with the X-Reality Processor. This is one hell of a chip, not that BE3 was any less but this one works on all inputs. Whatever you throw at it, SD/HD Content, Internet Videos, Blue-Rays DVDs even Analog TV, it always looks much much more crisp and better on the CX520. Because the X-Reality Engine performs its tricks on all inputs, where the BE3 only works with certain type of inputs e.g. Blueray etc.
I have a Dell UltraSharp 24 Monitor which I use for my PC. But After watching Youtube HD/SD Videos processed through X-Reality I have stopped using Youtube on computers. The Chip just fixes everything is such a way that simply cannot tune even your top of the line monitor to get the same result.
I can tell when the X-Reality Chip comes into action. There is about a 1 sec or less delay when you get to see the non-processed video before the Chip comes into action and blows you away with post-processing results.
I don't need to fool myself by saying its a Marketing gimmic or whatever, I know what It does, coz whatever it does shows, and shows big time. And Yes thats just the lower so called stripped off model not the X-Reality Pro.
I have made a review of this TV, below is the link. Although the video quality is not fair but you'll get the message.
Sony Bravia 32CX520 TV review - YouTube