Hi, a friend pointed me to this. I actually own an 04. I am wondering why you want on 03-04 as opposed to an 02-04?
SInce 2000-2004 is (known as the WD22) is the first. gen the 2000-2001 is the "first gen." and the 02-04 are commonly known amongst the Xterra community as gen 1.5 since it had a facelift. The most obvious change between the years is headlight. 02-04 have round while the 00-01 are square. The dash was also changed for those years.
There was also a HP upgrade from the the two different engine
The most common engine is the VG33. Notorious for reliability, but also slow. The VG33ER was introduced with the gen. 1.5. It is a supercharged VG33 with 30 more HP. However, I would advise against it.
One problem that you will see with these engines is the knock sensor. The knock sensor goes bad on nearly every singe VG33 engine. ON the NA engine, it does nothing, and it is completely fine to run the engine with a bad KS. With the SC engine, a bad KS will put the ECU in failsafe. THis will greatly affect the performance and MPH.
There is one difference between the 02 and the 03-04 supercharged models though. the 03-04 models have a double core radiator. I initially wanted a SC engine, but I am really glad that I have the NA due to KS issues.
There was also a 4banger model available with a reliable KA24DE engine, but I wouldn't do it. Too gutless for a vehicle this size.
The timing belt is due at 105K. The distributors go bad at about 10 years and the symptoms are easy to recognize and can be rebuilt for under $10. Number 6 spark plug is a nightmare. Number 4 is too on the SC models.
I would say that both the auto and manual trans are reliable units. There are some issues with the auto at extreme angles. Do not put a centerforce clutch into a manual.
As far as the second gen.s, they are incredible. They only have the VQ40 engine in there and it is extremely reliable. There have been timing chain issues that are under a recall. There were also control arm recalls. None of these have been very consequential.
The rear diff on the second gen.s are weak. Also, there are fuel pump issues in 06 and 08. These fuel pump issues have been addressed and the fixes that Nissan has proposed are pretty much worthless. There is also some issues with an electrical unit called the IPDM. The IPDM is about to be recalled and fixed. I believe there is going to be a recall issued on the IPDM within a month. I have seen a couple of ECU issues as well. Nissan offers a 80K warranty on it though.
You are right. For the Xterra, frontier, and Pathfinder, 05 was a groundbreaking year as far as technology is concerned. I like the old school technology that existed in the 04-prior.
I am a former Nissan mechanic BTW. That's why I am a Nissan thesaurus.
That may be all you want to know. I am personally a moderator at www.clubxterra.org. It is an incredible community. Feel free to remove this sentence mods if you want. My screen name there is Soccerbrace.
Here is my build thread. I've got soooo much money into it right now. Currently collecting parts for a solid axle swap. Currently broke too so it ain't happening any time soon.
http://www.clubxterra.org/forums/showthread.php?t=3234




pretty much summed it all up! Definitely get over to clubxterra.org and look around and ask questions. You will find a lot of Xterra enthusiasts there with all sorts of Xterras ranging from stock up to rigs that only somewhat resemble what an Xterra looks like. I am on my 3rd first gen and absolutely love them! I have had no mechanical issues and only a few cosmetic alterations due to off roading! 
