I just installed my new system. I think I will be needing a cap but would like your opinions. I will be getting an optima yellow top so did not know if that would make a difference or not.

I have a pioneer 800 watt 2 channel pushing 2 Alpine R 10's. I also have a Rockford Fosgate 100x4 pushing my kickers mids.

My headlights would dim to the beat with my old 12 I had. If I just put in the yellow top would that stop it or should I do the battery and the cap?

The capacitor will not likely solve you dimming lights issue. I did nothing for mine. The Yellow top will help some, but what you really need to do is upgrade the alternator to a high output one. Ther are some after market manufacturers like Mean Green but the most economical approach is to buy a used one from a Nissan Quest from a junk yard. You could also buy a remanufacturered one from PepBoys or some other store like AutoZone, Advance Auto Parts, etc., someone on Ebay has a high output alternator listed for the Xterra also, I think it's 165A. Whatever path you choose you basically need more amps coming from the alternator to accomodate the draw from your amps. I personally am running an 800W Orion 8002 in bridged mono to a 15" Sub pulling the full 800W at 4 Ohms and an Orion 4004 running my mids/highs at 50W x 4 at 4 Ohms. I bought a used Quest alternator from a local junk yard for $40 and it eliminated my dimming light issue all together. A lot of car stereo buffs will also tell you to upgrade your battery cables to larger guage. Know as the big three: battery to alternator, battery to chassis and ground.