I am in week 2 with my new xterra and I spent way too much time reading this forum last night. I am wondering if the bottoming out issue was resolved in newer models or do I need to keep an eye on it? Also, are the rear differential issues resolved as well?

There has been no change as far as the bottoming problem is concerned. The rear suspension is very soft and the bump stops are hard rubber so when they hit you really know it.

The bottoming out can be cured by adding Timbren bump stops or lifting your X depending on what you want to do.

The rear end problems have all been related to the M226 rear end that comes in the Offroad model or the stick shifts. The original 2005 models had more problems but these were reduced in the later years when they went to a 4 spider rear end.

If you have the C200 rear end no worries at all.

Don't the Offroads have a firmer suspension, and thus be less likely to bottom out? The bump stops sound like a cheap fix, at any rate.

One thing to realize is that forums can make problems seem much more common than they actually are. Try not to get too wound up about things that might never happen.

The Offroads have the Bilstein Shocks but the same springs. While the shocks do dampen the ride a little bit better if you have people in the back seat or are doing towing the rear end will bottom the same as the other models.