I just now saw this thread so here is my 2 cents...
I have a 2004 Xterra. It has the 3.3L non-supercharged motor and it has
NO BALLS. It does not really meet my needs but I still think it's a great vehicle.
2005 and later have the 4.0L motor which has a lot more power. Also, 2005 and later have the knob instead of the transfer case lever. Depending on which model you get, it comes with an electric rear locker. I think it's the "Off-Road" version that has the locker.
Now if you want to some more than mild wheeling in it, say, when the wife is on vacation or something
then expect to break off plastic things (like you see on the pics from previous posts). Also, anticipate dents just under the doors unless you put on rock sliders.
If you want to do hardcore wheeling, plan on other more $$$ stuff happening on the trail. For example, CV's, hubs, rings and pinions, transfer cases, etc. There has even been reports of the rear diff coming apart in the xterras with the e-locker. Supposedly this is because to accomodate the locker unit in the existing axle, the ring is thinner than what you would find in the non-locked Xterra rear axle.
A great source for information is on xterraownersclub.com. Here's a great thread from that site discussing the "Off Road" vs. the "S" Xterra:
http://www.xterraownersclub.com/cgi-local/ultimatebb.cgi?ubb=get_topic;f=78;t=000400
Also there is some good aftermarket stuff available.
ARB -- Bumpers, snorkel and more
Warn -- Winch, of course!
Calmini -- Bumpers, lift, rock sliders, skidplates and more
Shrockworks -- Bumpers, rock sliders, skidplates
I think your wife will love the Xterra. It's reliable, comfortable, great for camping and exploring and it's pretty cabable.
I hope this helps!