You definately want to stay away from the 05. They upgraded the spider gears in 06 and have had a lot less failures. That being said my 06 off road had rear diferential failure at 11,000 miles. It appears that if you don't get the rear locker your chance of failure goes way down. I really like the additional power. I am able to tow a 21' travel trailer quite easily. The other thing to consider is that the 2nd generation Xterra gets better fuel economy the the first. I get around 17 in town and as high as 21 on the highway. You are getting as much as 100 more HP in the 2nd generation X as you would on most 1st gens.