Trouble with my nissan xterra 2005

You've basically answered your own question, if you want to know specifics on your transfer case I can find that out for you but it is evidently broken. Most awds have some sort of clutch mechanism inside that allows some slippage between the front and the rear. When this goes bad it will either grind like you indicated or lock up causing the tires to skip on pavement. The front and rear are working against each other causing the grinding on pavement, you won't notice this on snow, dirt, gravel or ice because your tires are sliding rather than putting so much stress on the transfer case to make it grind.

at the panel-view the owners manual or ask a partsplace--the horn cud be bad too--pick one up at a junk yard

One of the wheel speed sensors is failing . A 'high end scanner' needs to be hooked up to monitor which one is glitching

Hello

Rattling Noise is due to the following reasons:

1. Engine Rubber Mounts (Solution: Get them replaced)
2. Constant Velcoity Joints---CVJ (Solution: Get them replaced or greased---there are steel balls in it which may rattle)
3. Steering system (Rack & Pinion): Check for loose Inner Ball Joints as well as Torn Rubber Bellows (which means there is dust, foreign particles between moving parts)
4. Steering System(Column): Loosened parts.
5. Engine Tuning Out.

These are primary reason, eliminate one by one and you will come to know the root cause.

If you grab it at the 12 oclock and 6 oclock positions and try to pull and push on the tire/wheel, do you still get this movement? is the noise like a constant grinding or deep drone type noise? Odds are the wheel bearing is failing. You need to stop driving it immediatly and have it checked, if it is the bearing it could overheat and lock the wheel up while driving and cuase a serious accident...
Hope this answers your question
Sincerely
Roger

Also- the rattle is most likely the valve lifters. The lifters on this engine and the model previous (I have owned both to 180k miles or more) lose pressure when the motor is off. They re-pressureize with engine oil after the motor starts and tap a little until they "pump up" to full size. Just don't drive until the rattle dies down and as long as it is under 30 seconds or so- you will be fine there.

You need to find out why it is rattling. Something is broken, come loose, or bent. Have it fixed as that is not the way it was designed.

Take a look at Nissan Technical Service Bulletin NTB05-15b. Title = "Rattle Noise From Vias Power Valve Actuator / Intake Manifold Collector" This appears to describe your problem exactly. I have the same problem with my 2005 Xterra and I am going to try the recommended fix myself at home.

regards,
Willyswan

Check the brake caliper mounting bolts. One may have come loose!

I had rattling noises as well (over bumps and when I reved the engine) and it turned out to be the heat shields under the car. I took out 2 heat shields covering the two cats on both sides AND two rusted out dangling rings hanging from the exhaust coupler (have NO clue what they were for)..This has TOTALLY gotten rid of the rattling noise. Good luck!