The 2 biggest drawbacks of the xterra:
Ground clearance: Coming from a 2nd gen 4runner, the xterra has nothing! I haven't run up on anything yet when wheelin, but thats mostly because I know the truck is kinda low, so I use common sense.
Wheel travel/articulation: Another negative of the x. Without a rear locker, youll find that getting 'two wheel' stuck happens more often than you'd like. This is probably the number 1 limitation in my opinion. Invest in a rear locker and wheel travel wont matter as much anymore.