I have a 2001 that I bought new (29 miles on it). At @ 55,000 miles it overheated and I found water (antifreeze) in the oil. Took it to the dealer they suspected it had a bad head gasket (which is what I thought also). They replaced the head gasket, the day after I got it back, it did the same thing...overheated and antifreeze in the oil. They came and got it, turned out my cylinder head had become porous...developed a leak, they had it pressure tested and found the leak. The tech called the engineers at Nissan, and according to them my truck (at the time) was the only Xterra in the country to have this problem that they knew of.
I've driven 20,000+ miles on it since and no problems, other than a leaky themostat housing.
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"There must be a hell of a ballgame going on upstairs. God must have needed a No. 3 hitter, because he took Puck away from us way too soon."
-Kent Hrbek