OK, just so everyone knows, Federal emissions Xterras don't have 4 cats.

If you crawl under the X and look at the exhaust, up by the exhaust manifolds, you'll see 4 parts.

The first part (1 on each side, bolted to the manifold) is the actual cat. It is the only cat (1 per side). Verified by the fact that the O2 sensor that you can see from underneath is the rear O2 sensor. That sensor is for diagnostics of the cat only, and does not control fuel mixture like the first one does (the one you can see from inside the engine bay).

The other big piece of metal that you see (sure looks like a cat) isn't a cat, but is in fact a pre-muffler for the exhaust.

That's all it is. You can take that piece off and put in a straight pipe (I'd reccomend going to the size of the exit hole for the cat) and it will not affect your emissions or throw a code!

The Law for the cats is meant to state (in layperson's terms) that removal of the cat for the purpose to run the vehicle on public streets is unlawful. If relocation of the cat is the purpose, and the primary function of the cat is not circumvented, then relocation is acceptable. But remember, you'll have to relocate the rear O2 sensors to behind the relocated cats in order to maintane the function of the diagnostics of the X. You'll have to leave the front O2 sensors where they are, as they need a lot of heat to function. Their placement is critical.

If you do relocate the cats (or go to a big one, like on the older Chevy trucks [3" in and 3" out!]) then you may have to add an air pump to the system to get the cat up to operating temp and keep it there. Just like the old Chevy trucks.

Relocating a cat isn't something that you 'just do' one day. It's a process and you should know what you're doing. Not taking the extra steps into consideration can lead to emissions failure due to a lack of follow-through.

But if you're willing to perform the necessary tasks, then by all means, you should see some performance gains from a set of headers, opening up the exhaust system with a nice exhaust system and bettering the intake. Especially the S/C guys.