Wish I had seen this earlier, but you made the right decision anyways.
While it’s possible for a chip to improve horsepower, a chip alone won’t really do anything good for your MPG. One thing that does work (at least in my experience) is a little work on the intake side.
Even a simple drop-in K&N filter in the stock airbox makes the engine a little less asthmatic. Whether you use that to get more power or more MPG through reduced pumping losses is up to you. Be warned though, the gains are pretty modest; around 2% or so. A full cold-air intake gets about 5%, but paying six times the cost of a drop-in filter for something only twice as effective isn’t really cost-effective, at least not when you consider that the gain in your case would be less than 1MPG.
What I have found to be the biggest factors in fuel economy are:
1) Vehicle condition – My ‘85 Toyota averaged ~20 MPG when I first got it. After changing the plugs and oil, it went up to ~22, or about 10%.
2) Tire pressure – Affects rolling resistance. Personally, my driving style is such that if I don’t inflate the tires to about 6PSI over factory specs (not to exceed the maximum recommended by the tiremaker though!) then I wear the edges more than the middle, especially on the front; a textbook sign of underinflation. However, the added pressure has a bonus side-effect of better MPG.
3) Driving style – It should go without saying that jackasses who treat every green-light like a drag-launch get poor MPG. Smooth, steady acceleration is more fuel-efficient.
However, depending on the vehicle, you might actually get better MPG at higher speeds, so those people who recommend doing 45 MPH on the freeway are largely full of it. Many of my vehicles have achieved better MPG at 60 MPH than at 50 MPH along the same route under the same conditions, so going slow isn’t the answer. However, letting off the gas a bit sooner and coasting to a stop sign/red light helps quite a bit, and you should have enough momentum to conserve speed well enough to not piss off the people behind you.
Some automatic transmissions are also set up in such a way that you can go the same speed with less pressure on the gas pedal. My old Aerostar was particularly “sloppy” this way, and once I learned the feel of it, I went from 15MPG to ~23.5 without driving any slower. Granted, most of the other slushboxes I’ve driven only picked up another 1–2MPG that way, but every little bit helps, and there is a slim chance that yout Xterra might be as generous as that old van of mine.
4) Constriction in the intake and/or exhaust system – The harder it is to get air in and out of the engine, the more energy from the burnt fuel goes into pumping air which means less energy to move the vehicle. many of the mods made to performance engines can also help MPG if you keep your foot out of it because they work to reduce these “pumping losses”. Try breathing deeply through a soda straw and you’ll see how that works.
Unfortunately, those same mods tend to make some people drive like jackasses, so it takes a little discipline for this route to efficiency to actually work.
Nowhere in there is there any mention of the chip, and there is a reason for that. The stock chip in most cars is calibrated to maintain the most efficient fuel/air ratio and ignition timing possible without hurting the engine. Sure, you could make it run a leaner mixture, but that would likely also make it run hot enough to have serious effects on engine longevity. I think it’s worth a minor MPG hit to extend the life of the engine at least tenfold; I am not a fan of replacing burnt valves or otherwise rebuilding an engine every few months.
Chips alone won’t do it, and anything that claims to increase your MPG more than about 5% is highly suspect.