Yeah, Redline BAD!!!
I still have the Redline D4 ATF in the transfer case and it's fine, but I wouldn't use Redline in the differentials or the gearbox if you have a manual. I switched to Amsoil in the rear differential and the gearbox and everything is fine again. Amsoil Series 2000 75W-90 gear lube is what I used.
Use ATF in the transfer case whether you have an automatic or a manual. As Scott mentioned, the owner's manual gives you two answers, but three different Nissan service departments told me ATF. Since then I have heard that Dexron III/Mercon ATF is a GL-4 lubricant, but I'd just use the ATF and be sure.
I know quite a few people are using Mobil 1 in the manual transmissions, but keep in mind that Mobil 1 is a GL-5 lubricant and the Xterra calls for GL-4. Nobody seems to be having any problems, but I'd consider warranty issues and such. Almost all synthetics are GL-5. Only Amsoil, Redline, and I think Royal Purple are GL-4 rated.
FYI, Redline 75W-90 gear oil made my rear differential howl like you wouldn't believe when cold. So loud I could hear it over the stereo. Redline MT-90 gear lube (which is what is specified for the Xterra) made shifting impossible; especially when cold. It was so bad I often couldn't engage several gears for 5-10 minutes in the morning. I've heard the Redline MTL works OK, but it is a lighter weight oil and not recommended for use in the Xterra by Nissan or Redline.
And don't ever, ever, ever put Valvoline SynPower synthetic brake fluid in your truck! Trust me, I learned all about it the hard way. Ever change out the brake or clutch fluid use Castrol GT LMA. Not related, i know, but figured I may as well mention it.
Good luck!