One problem related to transfer case has been reported for the 2006 Nissan Xterra. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2006 Nissan Xterra based on all problems reported for the 2006 Xterra.
Failure of 4 wheel drive power train due to failure of abs sensor. This a dedicated off road vehicle with off road package installed by factory. The abs system should not trump the 4 wheel drive and cause it to not engage. If I was far off road and 4 wheel drive system failed, I could be subject to serious injury or possibly death due to adverse weather conditions as I would have to walk and get help in prevailing weather conditions.