What oil type to use is the least of your problems if your engine is truly "knocking" from an oil related issue rather than poor gas or ignition timing.

All motors have some sort of valve train noise, the Xterra just happens to be on the "louder" end of the scale.

I had a 1989 Mazda B2200 PU and it had alot of valve train noise (much worse than the X) and I put 200,000+ trouble free miles on that truck.

Kinda like, "takes a licking keeps on ticking ".
(I know bad pun)