You can check out my display case thread and several "how-to" sections and 1st Gen stuff under the Garage section. The 3.3 is underpowered but with a good Cold Air Intake, bigger 200cc fuel injectors (OEM is 170cc), an Aeromotive racing Fuel Pump, Iridium plugs paired with Nology Hot Wires, and an upgraded exhaust, it makes plenty of power and torque. I can personally attest to that. Later you can also get an upgraded cam set, headers, a reflashed ECU, upgraded internals like pistons, valves, port and polish, etc... The list is endless.
The point is that, like any motor on any vehicle, how much RELIABLE power you get out of it really depends on how much money you put into QUALITY parts and a well rebuilt motor as a foundation.
The best way to start a build is to GO OFFROAD WITH US. We always do easy, 2WD, stock-friendly Xcursions. Then you can personally see what you can upgrade, why, and what other xterra owners have done.