I previously owned a 1996 A4 (2.8, the slow year) and a 2000 S4. The S4 got stolen a few weeks ago; it's been recovered but was totalled. I didn't mod it extensively; I put some new brake pads on to avoid the brake dust, a driveline stabilizer, and a short-shifter kit.

My needs have changed now, and instead of a manual sedan, I'm really looking toward a Tip avant. The new tips sound like they're a far cry from the old automatic transmissions, and it'd come in really handy for city driving.

Much as I love the '05 S4, I'm going to school full time for the next three years, and can't justify spending $50k on a car when I have no source of income. So for roughly $30k, I could find another used B5 S4, or I could buy a B7 A4 3.2.

The B7 performance numbers sound pretty nice. I don't drive fast; I live near Boston, and rarely get a chance. I do need to accelerate fast for city driving, and a N/A engine should help me there. And I don't mind getting some of the new B7 perks like adaptive headlights, rain sensor, dual climate control, seat memory, etc.

What are people's thoughts on the advantages/disadvantages of the B5 S4 vs. B7 A4? Does anyone know if the U.S. tip is 6-speed or 5? I've seen reports of both.

I think that you will be quite impressed with the Tiptronic on the B7. It is a 6 speed Tip also found on the S4 and A8 (I think).
Very quick shifting and very smooth; as you said, a far cry from the old tip! :)
The B7 A4 will also have similar suspension layout as the B6 S4 as well as new A6 components as well.
For what I have read in magazines about the new A4, it is quite impressive. It will also be availabe with Servotronic which will also improve steering.
I can tell you that I found the new A6 quite fast with the 3.2 so I can only imagine what it is going to be like in the new A4.
i don't think that you will be disapointed, and besides you will have a lot of exclusivity as it will be new and not many will be out there! :)

look at the B6 pricing for the 3.0...you're looking at mid to high 30's for the car you likely want...

A 3.2Q will be about $38k or so.
When the CVT comes along next year it will be mid $30k.