if xenon HID's are so bad...why is it a $1000 option on bmw and mercedes cars?
Because they can get away with it. Most BMWs and M-Bs are bought off the lot, not custom-ordered. In that price range, $1K isn't the deal-breaker it might be for a Honda or Toyota. Actually, it was $500 on our Bimmer, which I bought off the lot because it had all the other stuff I wanted. Far as that goes, how come the German manufacturers can get away with charging $2K for a particular paint color. Same deal.
Too, I suspect lots of folks buy them simply because they think the blue lights look "Kewl", a la the people that buy the blue-painted cheap halogen bulbs which put out less usable light than the oems. Dumb, by my standards, but, hey, there's no accounting for taste.
My point was not that HIDs are inherently "so bad" - it was that 4th gen 4Runner oem lights are very good, and the liklihood of improving upon them, particularly with aftermarket stuff, isn't high. It's not how I'd choose to spend my spare several hundred dollars, anyway.