Indeed, they are air-cooled. There are some water-cooled alternators out there. Cadillac Northstar engines, many BMWs, and Mercedes diesels have them, but none can be adapted to fit an Xterra since they're partially integrated into the block. The reason they use them is because without the cooling fan they are considerably quieter and better suited to ultra-quiet luxury vehicles.
Hitachi makes one that looks like it would work for the X, same type of mount etc, but as I understand it is for industrial applications and considerably larger than ours. The photos I've see have nothing to use for scale, but I called them up last year to ask about it.
Brent
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