I have a 2000 xterra (two wheel drive) - the left rear axle seal is leaking. Does anyone know how to service this? Do I need special tools?

I've replaced one on mine. It's not an easy job without the correct tool. It's in there REALLY tight. You could probably get the old one out if you just went ahead and destroyed it, but you risk damaging the bearings in the process. The correct tool will go through the hole in the center and then spread to fit across the whole thing from behind so it can be pulled out. I was lucky enough to be able to borrow the proper tool from a dealership...

Brent

Thanks - how is the axle shaft removed from the housing in order to get to the seal?

Remove the wheel first if you haven't already. There are 4 bolts holding the axle/brake assembly to the end of the axle tube. Disconnect the brake line, e-brake cable, and remove the ABS sensor (actually, your 2WD has only one sensor at the driveshaft, not necessary for you, but for reference), and you can then pull the axle/brake assembly out (might take a little yanking to get it started).
You'll need a way to cap off the brake line or the fluid will just keep running out, and BE SURE to support the weight of the axle/brake as you slide it back in or you'll tear up the new seal.

Thank You!!! First thing in the morning I'll get started. It sounds fairly straight foward. I'll check back in when I'm done & again...THANK YOU for the help!

Everything went fine - It's back together & so far so good. Thanks!