I don't know of anyone that has actually done something more than rudimentary to try and keep the alternator from getting wet/muddy etc.
Seriously, unless you want to do some extensive work to relocate it, there's not much you can do. I'd love to install a sealed, water-cooled alternator in there, but they're quite expensive, and there are none that I've found that would fit the Xterra anyway. They're used on some luxury cars, not because they handle mud better, but because they don't have a cooling fan and are almost silent. BMW and the Caddy Northstar engines have 'em, but they're almost integrated in the block and couldn't be adapted in any way. I know Hitachi makes one similar to ours in shape, but it's much larger, made for dozers and the like.

Brent