I believe that the stock exhaust on the 1st Gen XTerras was 2.25". I too put a Flomaster 40 series on my '02 SE/SC and noticed a noticeable difference in performance and a subtle increase in MPG (key word is subtle). If you wish to change all the exhaust pipes from the catalytic converter back, I believe that the largest size that most do is 2.5". The general rule of thumb is that the larger in diameter you go, the more you increase your top end power range and the more you decrease your low end torque. I've seen people w/ 3.0" exhausts and while they sound like a rocket, they have very little power at the low end range. Keep in mind this generally holds true for 6cyl. engines. Big blocks can handle larger diameter exhaust systems.

Hope this helps.

Devandra