BMI still has validity, but mainly as a statistical measure of population characteristics. It is far more useful in combination with things like Waist Circumference. As has been pointed out, it has many failings but what we actually want to know is body composition. External measurements will also miss the TOFIs (thin outside, fat inside!) who have high levels of mobile visceral fat, which increases risk of cardio-vascular disease significantly! Unfortunately, at present, the best methods for measuring body composition are DEXA, hydrodensitometry and doubly-labelled water, all of which take time, money and need specialist equipment.
The electrical bioimpedance devices are ok-ish - unfortunately, standardisation is the issue and everyone should only be measured following an overnight fast, no exercise in previous 24 hrs, same levels of hydration, etc. Nutritional and hydration state affect impedance, as do the the points you measure between (foot-to-foot, foot-to-hand, etc).
I've always found the best methods are to eat healthily, look in the mirror to check your body shape, make sure you can still see your feet and lose some weight if your trousers are getting too tight. Simples.