I have recently sold my 125i, and to date it has been the best car I have owned.
When I bought it new in 2009 I was looking for an affordable, small rear-wheel drive car.
I didn't want a convertible, which ruled out the MX-5, so I was left with the option of either the 125i or a Mazda RX-8.
The RX-8 felt the more nimble of the two cars, but the 125i had it's measure in every other area, in particular fuel economy and service intervals.
Over the 50,000km and 3.5 years I owned the car, it had given me no problems whatsoever. It also returned on average 8.5L/100km, which is impressive considering the car accelerates from 0-100 in 6.4 seconds. Usage was approximately 50/50 city & highway driving.
Comfort was great on long trips, and the hands-free bluetooth system was crystal clear for the many business calls I had to make.
The back seats were serviceable - I'm around 178cm (5'10") and I could fit comfortably in the back seat behind my usual driving position.
Whilst I mentioned the RX-8 may have been the superior car in the handling stakes, the 125i was still a brilliantly engaging drive on twisty mountain roads and a great weekender. The stock run-flat tyres were a little harsh, but once I had replaced these with some normal tyres (+ a repair kit in the boot), the ride improved greatly.
Dealer servicing can be a little expensive, but there are plenty of specialist BMW mechanics around with much more competitive pricing.
All in all a brilliant car, and I highly recommend it.