I have an 04 Xterra XE with stock shocks and every time my wife gets in she complains about the rough ride. I know most of you guys purchased the Xterra for off road adventures, but living in a metro area, my lifestyle doesn’t provide much opportunity for such extremities.
Is it possible to soften the ride with different shocks? I see a lot of posts about improving your ride, but that doesn’t tell me if by improving you are stiffening or softening the suspension.
Also, in general, if I use a softer shock absorber, will that change the height of the truck?

no it should not change the height of the truck, just the ride when the suspension travels. I dont know which shocks to suggest, im sure someone else would. I have an 04 XE and I dont think the ride is that bad, its better than my dads 01 pathfinder.

In talking to my dealer, he recommended staying away from anything less stiff than the OEM shocks because of the increased roll effect you would feel on cornering. This now brings me to my next question of just how different the ride will be if I went with lets say a Bilstein 5100 with OE valving?
I see a lot of talk about the 10% and 20% stiffer but not about the ones with a 0% stiffness increase.
http://www.spencerlowracing.com/products/bilstein_5100.htm
Is it worth the $240 to get new OE valved Bilstein shocks on a truck that has 12k on it?

Get OEM spec Bilsteins. That will help a lot. Lower the tire pressure (but you'll lose MPG). You could also get a softer rear-leaf pack built for you. There are some custom shops that can do that for what kind of ride you want. Since it's a truck, I would agree with your dealer that you don't want to go softer due to cornering. The 10-20% crowd is doing that for increased weight they have on their vehicles due to offroad-mods. Stock Bilsteins are an improvement all their own. Stay away from NISMO as it's just an expensive Bilstein with silver paint.

I just put on some OE Valved Bilsteins from SLR on my 2000 SE.
My truck is also driven by the wife and the stock shocks were shot.
There is no question that the Bilsteins shocks are better in quality than stock shocks.
To be honest I can’t say I noticed much difference in ride quality, but it needed shocks and I put some good ones in there myself. The decision was easy. The dealer wanted $350 to replace the rears. I bought all 4 Bilsteins for $255 and did it myself.

I don’t think lowering the tire pressure is a good idea. Your MPG goes down and if you are primarily doing street and hi-way driving it can be dangerous if you got too low in pressure.
Do you remember the Ford Explorer/Firestone fiasco?
Ford had told it customers to lower the tire pressure on their SUV’s for a better ride, and Explorers started rolling from tire failures.

Not good.

I don’t think lowering the tire pressure is a good idea. Your MPG goes down and if you are primarily doing street and hi-way driving it can be dangerous if you got too low in pressure.
Do you remember the Ford Explorer/Firestone fiasco?
Ford had told it customers to lower the tire pressure on their SUV’s for a better ride, and Explorers started rolling from tire failures.

Not good.

Lowering your tire pressure to 32 psi in a good C rated LT tire is adequate for the load capacity of the Xterra. Tires will wear evenly, provide good traction and offer good ride comfort. It seems like the tire places always want to put 40-45 psi in the tires!