It's a tough call, and ultimately you'd probably be happy with either truck. I own a moderately modified '00 4runner 5spd, and I've driven a modified XTerra on several 1000+ mile road trips and on the Rubicon and Golden Spike trails among many others. For comparison's sake the XTerra is a V6 5spd with a 3" lift, 32" or 33" tires depending on the trip, a rear ARB locker, full skids, and 4:1 crawler gears. The 4runner has a SS 1.2" lift, 32" MTs, rock rails, and an open rear diff (for now).
So offroad: tie
Offroad each truck has it's benefits. The 4runner has a lower stock crawl ratio which is helpful, especially with a manual transmission. It also has an available rear locker which is invaluable on the trail. I prefer the front coil setup of the 4runner over the torsion bars of the XTerra which don't flex very well. The XTerra is a bit shorter which is a benefit on tight trails, has arguably stronger axles and steering, and the plastic front and rear bumpers deform when they hit rocks instead of breaking.
Onroad: 4runner
This comparison is a bit unfair since the Xterra I'm comparing to has lead a hard life. But, even when comparing new vs new I find the 4runner to be a better driver on paved roads. The engine is smoother and more rev happy, the suspension is more compliant, and I like the extra features such as the power sunroof and rear window.
Reliability: 4runner?
My 4runner has 90k miles on it, of which I've only had it for 8k. Based on my experience and the service records it has had no major issues. The 3rd gen 4runner does have known issues with leaking rear axle seals, leaking valve cover gaskets, and gas guages. My friend's XTerra has about 90k as well and has also been pretty reliable. He's had to rebuild the transmission and replace front suspension components, but those were both likely due to extra wear from a lot of trail usage.
Power: 4runner
In my opinion the 5VZ-FE is a better engine that the VG33E, mainly because of smoothness and ability to rev. The XTerra's VG doesn't like to go much above 4k rpm which is annoying when accelerating quickly or passing.
I've spent a lot of time with XTerras on the trail and very much respect the vehicle, but ultimately I bought a 4runner. As I said initially, I think you'd be happy with either and the best way to make the decision is to drive a representative version of each truck.
How about some pictures?
XTerra on 32" tires on the Rubicon
XTerra on Slickrock
4Runner on Slickrock
SAS Xterra on Slickrock
- Matt