Nissan markets the Xterra as the ultimate SUV for young outdoor enthusiasts, but these three members of the target demographic weren't digging it.

Comments from the mud-covered trio of 20-somethings at a local mountain bike trailhead included, "That's the new Xterra? It's so ugly, it looks like it's already been run into."

Since the styling of the 2006 Nissan Xterra didn't grab them, we showed them the adjustable cargo tie-downs in back, the fold-flat passenger seat up front and the roof rack basket on top. Sensing a sliver of interest, we continued on about the 265-horsepower V6, washable cargo bay and available 380-watt audio system.

"Pretty cool, how much is it?" one asked.

"Around $29,000," we responded. "But it's a heavily optioned off-road model, which isn't the top of the line, but it's close."

The blank looks on their faces told the whole story. The Xterra may be marketed to SoBe-swilling college kids who have dirt in their veins, but it requires more than a part-time gig at a snowboard shop to afford. Other than that small hurdle, the Xterra is one of the most functional and capable midsize SUVs around.

The Good Stuff Is Going to Cost You
Redesigned in 2005, the Xterra was made slightly longer, taller and wider than its predecessor. Its wheelbase was also stretched by 2 inches, its curb weight went up 200 pounds and the base four-cylinder was ditched in favor of a single 4.0-liter V6.

For 2006, it comes in four trim levels, X, S, Off Road and SE. The entry-level "X" model is new, and lowers the Xterra's base price to under $20K, but that's for a two-wheel-drive stripper with crank windows, manual mirrors and 16-inch steel wheels. Four-wheel drive adds another $2 grand.

The Off Road trim adds another $2 grand to that, but you get power everything, keyless entry and cruise control along with bigger all-terrain tires, Bilstein shocks, Hill Descent Control and skid plates. Four-wheel-drive versions also get a locking rear differential and a sticker just over $26K.

As we told the mud triplets, ours broke the $29,000 barrier thanks to its optional five-speed automatic transmission, Rockford Fosgate Audio stereo, Sirius Satellite Radio, floor mats and a $615 destination charge.

Fixing the Problems
Look past the Mountain Dew marketing and the original Xterra was nothing more than a slow truck-based SUV with few options to keep the price down. Even in top-of-the-line supercharged form it was gutless.

Nissan fixed that problem by stroking the V6 from the 350Z out to 4.0 liters and hooking it to either a six-speed manual or the optional automatic. With 265 hp at 5,600 rpm and 284 pound-feet of torque at 4,000 rpm, it makes the Xterra plenty fast.

Our automatic ran from zero to 60 in just 7.7 seconds and through the quarter-mile in 15.9 seconds at 86 mph. That's over two full seconds faster to 60 than the last Xterra we tested and only a tenth behind the V8-powered 4Runner.

It's not only faster than before, it sounds more refined and has better throttle response. Just nudge the gas and this Xterra jumps off the line. Midrange torque is a little soft, but swing past 4,000 rpm and the engine wakes up with another surge of power that continues right up to the 6,000-rpm shift point.

Less Truck, More SUV
The Xterra is still based on a truck chassis, but it's the more modern F-Alpha platform that debuted in Nissan's Titan full-size truck and is used on the Frontier pickup.

With fully boxed frame rails, the overall structure is much stiffer and stronger. The suspension is still an independent dual-wishbone design with coil springs up front and a solid axle/leaf spring combo in back, but rack and pinion steering replaces the previous model's archaic recirculating ball setup.

If you're an Xterra owner, you'll appreciate the improvements immediately. This second-generation Xterra feels less like a truck and more like a modern SUV. Gone is the bouncy suspension tuning and the deafening levels of wind noise. This Xterra can be driven across states comfortably.

Not a Sports Car
The revised steering delivers decent road feel and there's less body roll than before. Its slalom speed of 57 mph is still slow, but we didn't expect much from a 4,400-pound SUV with 31-inch off-road tires.

More importantly the Xterra doesn't feel tipsy. Off Road models come standard with Nissan's Vehicle Dynamic Control, a feature most SUVs in this segment don't have. It works well without being intrusive both on road and off.

Four-wheel disc brakes with ABS are now standard but our 136-foot stop from 60 mph isn't much better than the previous model and only average for the segment.

Eats Dirt Better Than Before
Making an SUV better for the street usually translates into less capability off-road. After pounding the Xterra on some fast fire roads and a few tricky hill climbs, we think the new version is better in the dirt, too.

It soaks up bumps instead of bouncing off them and the more precise steering makes it easier to pick your way through ruts and around rocks. Maximum ground clearance is down from 9.9 to 9.5 inches but you never miss it as all the underbody components have been safely tucked in above the frame.

Departure angle is up, but the truck's approach angle and breakover angle aren't as steep. Despite this, lower gearing and less sensitive throttle settings in low range give the Xterra improved rock-crawling ability. Plus you can lock the rear differential with the push of a button.

The Electronic Hill Descent Control system makes going downhill as easy as setting the cruise control. There's also a Hill Start Assist system that keeps you from rolling backward if you stop on the way up a hill.

Keeping It Comfortable
The overall interior design is simple with large three-dial climate controls, a trip computer integrated into the gauge cluster and a good stereo layout.

Although there are fewer cheap-looking plastic pieces, the cloth seats look and feel fine. If you like big bass, the Rockford Fosgate system hits hard but the satellite radio (either XM or Sirius) is the more essential audio option. Safety has been improved as well with optional side seat and side curtain airbag protection.

The longer wheelbase makes for more front and rear legroom, while the additional height and width have added headroom and welcome shoulder room in both rows. The extra space gives the interior a spacious feel and there's enough room for five extreme athletes and their parachutes.

Cargo room behind the rear seats remains almost unchanged at 65.7 cubic feet. The hook count is up to 10, however, including two adjustable loops on the floor. Plus, the entire cargo area itself is hard plastic so dirt from your mountain bike can be sprayed out with a hose. It's a good idea but the surface is slick so anything that isn't strapped down goes sliding back and forth with every turn.

Dual gloveboxes and a larger center console give you plenty of space for junk up front. But like the cargo area, the space ahead of the shifter is slick and will send your cell phone flying the first time you make a quick stop.

More Mainstream but Still Extreme
Nissan did the right thing with the second-generation Xterra. It kept it capable while making it more attractive to buyers who think kayaks are on the endangered species list. Everything that needed to be better is better, from the ride and handling to the engine to the interior — it's all a step up.

The only problem now is convincing mud-covered mountain bikers that it's worth saving for. The ones we talked to may not have liked the way the 2006 Nissan Xterra looked, but we're pretty sure they would have liked the way it drives.